Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRITISH TRANSPORT DOCKS BILL

(By Order)

LONDON TRANSPORT BILL (By order)

WIMBLEDON AND PUTNEY COMMONS BILL [Lords] (By Order)

Orders for Second Reading read.

To be read a Second time upon Thursday next.

Oral Answers to Questions — NORTHERN IRELAND

Boundary Commission for Northern Ireland

Mr. Marten: asked the Secretary of State for Northern Ireland if he will make a statement on the current activities of the Boundary Commission for Northern Ireland.

The Secretary of State for Northern Ireland (Mr. Merlyn Rees): The Boundary Commission for Northern Ireland has recently notified me of its decision to begin a general review of parliamentary boundaries in Northern Ireland.

Mr. Marten: I am glad to hear that. Will the Minister at the same time seek to amend the House of Commons (Redistribution of Seats) Act 1949 so that the number of seats for Northern Ireland is increased, not because of the emergency but for reasons of pure justice?

Mr. Rees: I accept that the number of seats for Northern Ireland was set in different circumstances. It is still the Government's aim—a long-term aim, I

feel sure—to get a devolved administration in Northern Ireland.

Mr. Powell: And Scotland?

Mr. Rees: I am responsible for Northern Ireland, and I am glad that I am not responsible for Scotland as well. I am sure that the right hon. Member for Down, South (Mr. Powell) has enough on his plate without including Scotland. I am responsible for Northern Ireland and in that sense we stick to the 12 seats.

Mr. Kilfedder: Does the Minister realise that the people of Northern Ireland assume that the right hon. Gentleman is against an increase in the number of Northern Ireland seats because he puts party advantage before the democratic rights of the people of the United Kingdom?

Mr. Rees: I must admit that there are some hon. Members representing Northern Ireland whom I would not like to see duplicated here, but that is not the reason.

Terrorism

Mr. Gow: asked the Secretary of State for Northern Ireland whether he will make a statement about the level of violence and terrorism in Northern Ireland during the first three months of 1976, as compared with the first three months of 1975.

Mr. Biggs-Davison: asked the Secretary of State for Northern Ireland whether he will make a statement about the latest security situation in the Province.

Mr. Stonehouse: asked the Secretary of State for Northern Ireland how many sectarian and political murders have taken place in 1976; and what measures he is taking to reduce the level of this terrorism.

Mr. McCusker: asked the Secretary of State for Northern Ireland how many people have been killed as a result of terrorist activity in County Armagh since 1st January 1976.

Mr. Merlyn Rees: So far this year 111 persons have been killed as a result of terrorism. Of these, 92 were killed in the first three months, 45 of whom were


the victims of sectarian or interfactional assassinations. Thirty people have been killed in County Armagh. Between 1st January and 31st March 1975 a total of 40 people were killed. There has been in 1976 some increase in the number of serious attacks against the security forces. There have also been attacks on prison officers, two of them fatal.
In the first three months of this year 294 persons were charged with serious terrorist-type offences, including 40 for murder and 63 for explosives offences. This compares with 266 persons charged with terrorist crimes in the same period in 1975, including 36 for murder and 21 for explosives offences. So far this yeas the total number of persons charged with murder is 44; with attempted murder 21; and for firearms offences 116. Up to 26th April this year, 8·9 tons of explosives have been neutralised or recovered, compared with 9·9 tons for the whole of 1975. Co-operation with the Irish security forces continues to be good.
For the longer term, as I said to the House on 25th March, I and ministerial colleagues in other Departments are examining the action and resources required over the next few years to maintain law and order, how best to achieve the primacy of the police, the size and role of locally recruited forces, and the progressive reduction of the armed forces as soon as is safely practical. The examination continues, but I do not exclude the possibility of taking at least some modest steps in these directions in the foreseeable future.
It is of course for the GOC to decide how to deploy his troops, and it has never been my practice to make public statements on the details. But I can assure the House that force levels and security force activity will continue to reflect operational needs in each part of the Province, and in particular that there will be no change in force levels in and around the South Armagh area so long as the present high threat of violence there persists.

Mr. Gow: We are grateful to the Secretary of State for that detailed statement. Is he aware of the widespread concern in Northern Ireland about two figures he gave, the 92 people killed in the first three months of this year compared with

the 40 killed in the first three months of last year? Is the Secretary of State able to give the people of Northern Ireland reassurance that the prospective rate of assassination and violence in the coming months will be lower than it has been in the past three months?

Mr. Rees: I thought that the House would like the details to appear in the Official Report. Of those killed, 45 were victims of sectarian or interfactional assassination, and that is a sizeable proportion. Yesterday afternoon when I drove past Shaw's Bridge in Belfast I learned that someone had placed a bomb underneath a table at which both Protestant and Catholic workmen were sitting. That bomb was put there to kill. I looked at the scene with the police. What on earth can one do to protect people from that sort of thing? If this is what the para-military groups want to do, it is by far the most difficult thing for the security forces to prevent.

Mr. Biggs-Davison: When will the working party report to the Secretary of State and in what form will the report be communicated to the House? Has the working party considered the closer coordination of security functions between the RUC and the Regular Army and the UDR? In view of reports in the Sunday Times and elsewhere of troop withdrawals on a considerable scale after the marching season, can the Secretary of State inform us of the Government's intentions in this matter?

Mr. Rees: I have had a preliminary report from civil servants who report to me and a ministerial group. A great deal of it is the sort of information I should not like to see published. It would certainly be read with great interest by the Provisional IRA. I do not reject the possibility of publishing the report, but, on the basis of the preliminary report, it would be foolish of me to publish it unless there were further parts, which I have not seen, of general interest. Co-operation between the security forces and the police is a matter to be further considered. That is how to obtain the primacy of the police. I have seen many reports that the Army will be out of West Belfast by the end of the month. Like me, the Army and police feel it is hard to read this sort of article, often written by people who get


information that a unit is moving out of West Belfast when it is doing so quite properly as part of a tactical redistribution of forces. I sometimes feel that the people who print this stuff are setting out more to help the Provisional IRA than anything else. The movement of forces is not information which should be bandied about, but I can assure the hon. Member that there is no question of pulling the Army out of West Belfast.

Mr. Flannery: Would riot my right hon. Friend agree that no matter what security measures and precautions are taken—and I understand the terrible problems he faces—the situation in Northern Ireland does not seem to get any better? Would he not agree that a new political initiative is now absolutely necessary? Would he, for instance, consider calling a conference devoted exclusively to the problems of Northern Ireland and invite whatever forces he feels should be present?

Mr. Rees: I cannot use the word "better" in relation to the security situation, whose nature has changed considerably. The pure thuggery which is now going on would not be stopped if I found a political initiative. It is endemic and I do not believe that calling a conference would do anything to stop it. The Convention demonstrated the inability of the politicians in Northern Ireland to get together and our next steps must be slow but sure. There is no initiative to solve the Irish question waiting to be pulled out of a drawer in my Department. It is bad for Northern Ireland if we even give the idea that there is an initiative which the Secretary of State is not willing to pull out.

Mr. McCusker: In view of the appalling statistics, which indicate that more than a quarter of the people murdered in Northern Ireland have been killed in my constituency, does the Secretary of State still consider that County Armagh is a special emergency area, as defined by the Prime Minister on 12th January? Can he give us a report on the effectiveness or otherwise of the seven steps announced on that date and say whether he thinks the withdrawal of Army vehicles to 10 miles north of the border in my constituency is likely to help?

Mr. Rees: I know nothing of the withdrawal of Army vehicles to 10 miles north of the border. When I was in the border area the other day, there were vehicles around. What the officer commanding that area decides to do is done in the full knowledge of the problems of the area. The two colonels of the regiments there are excellent. They know what they are doing. County Armagh is a special emergency area. I do not want to talk too much about the movement of soldiers, but the fact that I said in my statement that we are keeping the same number of troops in the area is an indication of our special concern for it.

Mr. Neave: I thank the right hon. Gentleman for his reply, but do not the statistics show that this is likely to be a very bad year for explosions and explosive offences? Will he condemn the increase in UVF activity in regard to explosives? Does not the whole security picture show the futility of continuing talks with para-military organisations, which the Irish Minister of Justice so roundly and rightly condemned yesterday?

Mr. Rees: The hon. Member has a point about explosives. We have seized almost as much explosives this year as in the whole of last year, yet the explosions still continue. That shows how much of the stuff there is still around. However, the Army is doing very well.
As for talks with para-military groups, I believe that I am right to stay where I have been for the past year on this matter. There can be no negotiations with people engaged in violence. I have no doubt—and it is very rarely I can say that about anything in Northern Ireland—that there is revulsion against the men of violence on both sides of the community, and this shows itself in the increasing amount of information the police are receiving every day. The basic reason for this in the minority community is that when people are locked up, it is by the due process of law and not by me or any other Secretary of State.

Mr. Fernyhough: When my right hon. Friend says there is no intention even to consider withdrawal from Northern Ireland, can he say whether that view, which he put forward so emphatically, is


shared by all the Ministers in his Department?

Mr. Rees: Yes. It is shared emphatically by all the Ministers in my Department and in the Government. I have no doubt about that. If my right hon. Friend is talking about the withdrawal of the Army in the political sense of the term, I believe that that would be a recipe for disaster. However, the withdrawal of the Army is what I am about —though my aim of the past year or 18 months is best expressed as the primacy of the police. I look forward to the day when I can tell the House that there are fewer soldiers and more policemen in Northern Ireland and that the police are accepted throughout the Province.

Mr. Speaker: Order. In view of the grave issues involved in this Question, I allowed very much longer questions and answers than is usual at Question Time. I hope we can now return to reasonable brevity.

Government Departments

Mr. Beith: asked the Secretary of State for Northern Ireland whether he has any plans to alter the number and structure of Government Departments in Northern Ireland.

The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): Since the return to direct rule, the Department of Community Relations has been merged with the Department of Education; the Office of Law Reform with the Department of Finance: and the Department of Housing Local Government and Planning with the Department of the Environment. My right hon. Friend has no plans for any further changes, but he keeps the matter under constant review.

Mr. Beith: Is the Minister of State satisfied that the organisation of Government Departments no longer retains the makeshift, temporary character suggested by the fact that they were set up when there was a locally-based Executive in Norhern Ireland and Ministers did not have to answer to this House for four or five Departments each? Does he agree that it is important that the people of Northern Ireland should realise that this House governs Northern Ireland by a system of direct rule, not of a temporary character but established on long-term principles?

Mr. Concannon: The functions of Departments and the allocations of responsibilities are always determined by the need to ensure that political and administrative requirements are met at any given time in the most appropriate manner.

Mr. Powell: I congratulate the Minister of State on his promotion and wish him well with his extended responsibilities. Has he any reforms of the administrative structure in mind which might avoid my having to trouble him three or four times a week on the subject of paving, lighting and such matters in my constituency, since I am the only democratically elected representative of the people on these subjects?

Mr. Concannon: Not at the moment. I think that the right hon. Gentleman will still have to bother me about such matters.

Mr. Fitt: Does my hon. Friend detect a feeling in Northern Ireland, especially since the departure to another office of my right hon. Friend the Member for Salford, West (Mr. Orme), that the Northern Ireland Office is not as important as it should be, that in some way it has become lower in the priorities in the restructuring now taking place? Will the person in charge of creating employment in Northern Ireland play as much attention to it as was paid to it by my right hon. Friend the Member for Salford, West?

Mr. Concannon: My right hon. Friend the Member for Salford, West (Mr. Orme), after a hard stint of hard labour, has been gone for only a few weeks. I thank my hon. Friend for congratulating me, but it was a funny way of doing so.

Mr. Kilfedder: As regards the work carried out by the former Department of Community Relations, does the hon. Gentleman realise that there is a fear that money is being given to organisations which are para-military in nature and which are working in various communities? Will he institute an inquiry as to where the money is going?

Mr. Concannon: There is no need for such an inquiry. Community relations come within the Department of Education and are in its capable hands.

Statistics

Mr. Powell: asked the Secretary of State for Northern Ireland what further consideration he has given to the manner of publication of statistics of: (a) terrorist offences and (b) arrests, convictions and sentences for such offences, and in particular to clear presentation of the relationship between the two series.

Mr. Merlyn Rees: Statistics, including the number of indictable offences known to the police and those cleared up, appear in the Chief Constable's annual report to the Police Authority, which is published. In addition, a report "Statistics on Security", providing a range of security statistics, including persons charged, is issued by my Office on a quarterly basis. These reports are placed in the Library of the House. I am giving consideration to ways of making the quarterly figures more widely available by inclusion in the Official Report.

Mr. Powell: I am grateful for anything that will give a wider diffusion to these statistics, but will the right hon. Gentleman concentrate especially upon methods of presenting the degree of success attained in apprehending and convicting those who arc concerned with offences in a particular period?

Mr. Rees: There is one problem in that last respect which is very important —namely, that it is a matter for my right hon. and learned Friend the Attorney-General. The right hon. Gentleman will recall a very interesting debate on this matter in the House a few weeks ago. I want to see the collation given a wider distribution. To do so through the Official Report is a way in which I can bring it to the attention of right hon. and hon. Members.

Mr. Loyden: I recognise the problems that my right hon. Friend faces in Northern Ireland. I remain on the subject of security, particularly the matters which have been brought about by the Prevention of Terrorism Act, which are not confined to Northern Ireland. Will my right hon. Friend investigate the arrest of James Rutledge, a Liverpool born and bred person who was arrested under the Prevention of Terrorism Act? The obvious implication of his release is that there was no cause for his arrest. Does

my right hon. Friend recall that anxiety was expressed by Labour Members about certain aspects of the Prevention of Terrorism Act when it was introduced? The case of James Rutledge clearly demonstrates that anxiety.

Mr. Rees: I thank my hon. Friend for raising this matter. He has every right to raise it, but it is a matter for my right hon. Friend the Secretary of State for the Home Department. Unless I have it wrong, the incident did not occur in Northern Ireland and therefore it is not my responsibility.

Redundancies

Mr. Bradford: asked the Secretary of State for Northern Ireland what is the number of people made redundant who were technically based or skilled workers since the inception of direct rule in 1972, the number of new industries which have been introduced since 1972 and the number of jobs provided for the above category of workers in these industries.

The Minister of State, Northern Ireland Office (Mr. Roland Moyle): During the period 1st January to 31st December 1975 a total of 23,764 workers qualified for payments under the statutory redundancy payments scheme; 54 per cent. of these were in manufacturing industries, but I have no information on their occupational skills.
Since direct rule began, 194 new undertakings have been established in Northern Ireland with selective assistance from the Department of Commerce or the Local Enterprise Development Unit, or with assistance from the Northern Ireland Finance Corporation. It is not possible without disproportionate effort to give details of the types of employment provided by these undertakings, or by the expansion of existing undertakings which the Government also assist and which are an important source of jobs.

Mr. Bradford: Does the Minister accept that in view of the alarming statistics it would be of great benefit to Northern Ireland if he were able to persuade his right hon. Friend the Secretary of State for Defence not to proceed with the proposed defence cuts as they relate to Antrim, Aldegrove and Sydenham? The cuts will add another 2,000 plus to the


already unacceptable total of unemployment in skilled industries. Will the hon. Gentleman undertake to encourage his right hon. Friend the Prime Minister to pay a visit to Northern Ireland at the earliest possible moment to acquaint himself with the harsh realities of economic life in Northern Ireland?

Mr. Speaker: Order. There is a Question on the Order Paper about that.

Mr. Moyle: Thank you, Mr. Speaker.Defence cuts are a matter for my right hon. Friend the Secretary of State for Defence. Those are going ahead. The Department has initiated a review of the economic condition of Northern Ireland. One of the aims of the review will be to provide more permanent long-term prospects of employment than exist under the present defence arrangements.

Direct Rule

Mr. Budgen: asked the Secretary of State for Northern Ireland whether he will make a statement on his proposals for the development of positive direct rule.

Mr. Michael McNair-Wilson: asked the Secretary of State for Northern Ireland if he will take steps to provide for additional facilities for informing Members of Parliament and the public about policy matters within the responsibility of his department.

Mr. Molyneaux: asked the Secretary of State for Northern Ireland what further consideration he has given to methods whereby a more continuous surveillance of administration and security in Northern Ireland can be provided.

Mr. Merlyn Rees: I am considering whether any changes are required in the arrangements for direct rule, including any additional facilities for keeping Members and the public informed. I have, however, answered 508 parliamentary Questions and nine Private Notice Questions between 1st November 1975 and 31st March 1976, and a wide range of papers and reports on Northern Ireland are available in the Library. The Government are responsible for all aspects of the affairs of Northern Ireland and have made it clear that they will provide firm, fair and resolute government.

Mr. Budgen: Does the right hon. Gentleman agree that as direct rule may last for a number of years there is an overwhelming case for increased representation for Northern Ireland, so that Northern Ireland may enjoy the same representation here as the rest of the United Kingdom?

Mr. Rees: I have answered that point. I hope that the hon. Gentleman will notice that even if the law were changed and the Boundary Commission were to do its work on a larger remit, the change would not come into being until the General Election after next, so it could not have any immediate effect.

Mr. McNair-Wilson: I welcome the Secretary of State's apparent slight change of heart over the possible new institutions as a result of direct rule. The under-representation to which my hon. Friend has referred, and the fact that Northern Ireland has neither an Assembly nor a Parliament, which is a decision of this House, mean that Northern Ireland must have its Questions answered roughly every three weeks for three-quarters of an hour, while the problems of the Province remain matters of life and death. In those circumstances I ask the right hon. Gentleman to consider the setting up of a Select Committee. Within its confidential intimacy the problems of the Province might reasonably be discussed and probed so that Members of Parliament from Northern Ireland might receive adequate answers from Ministers.

Mr. Rees: Of course Northern Ireland is different: we have the great problem of terrorism in Northern Ireland. The Province consists of 1½ million people and it has a Department to look after it. It is smaller than Yorkshire or Lancashire. In that sense it does very well in the House. It is because of the particular problems of Northern Ireland that the difficulty arises. I can tell the hon. Gentleman that the 'phone calls to my outer office are about Northern Ireland. The vast majority of the letters that I am receiving are to the effect that their senders go for direct rule. They give reasons for taking that view. That is the general view that has come out of Northern Ireland.

Mr. Powell: I do not dissent in any way from what the right hon. Gentleman


said earlier about solutions and initiatives, but does he recognise that consideration has to be given to the provision of a wider scope for local government in the normal sense of the term in Northern Ireland? Does he agree that that would lead to a great improvement and alleviation of administration?

Mr. Rees: On the point about local government and the fact that under the Macrory Report changes were made, putting it into Stormont, one of the problems in that respect—it is not something that I am actively considering; I say this only because it illustrates the point—is that on the minority side of the community it is put to me firmly that the last thing wanted is a return to the local government functions in Northern Ireland. This is one of the problems. When one comes to do anything in Northern Ireland, one cannot look at it logically. There is the basic split in the community.

Mr. McNamara: Has it been drawn to my right hon. Friend's attention that there are only 16 Questions on the Order Paper today relating to Northern Ireland, although on other occasions there have been somewhat more, and today there are only eight Questions from hon. Members representing Northern Ireland constituencies, which is roughly two-thirds of the number of Northern Ireland Members. The people of Northern Ireland, through their elected politicians, had an opportunity of finding some sort of administrative and institutional function which would have enabled them to look after these matters themselves, but they lamentably failed to do so. Therefore, it comes badly from Opposition Members to suggest otherwise.

Mr. Rees: I take note of what my hon. Friend says. It is a matter of note that hon. Members should consider my responsibilities for Departments of Education, Agriculture, Health and Social Security and right across the span. Ministers are working actively all the time in these matters, but the amount of interest in them expressed in the House of Commons is remarkably small. Even when there is a larger number of Questions, rarely are they on the subjects that I should have thought would exercise people in Northern Ireland.

Mr. Biggs-Davison: In the interests of the whole House, may I ask the Secretary of State when he will act on my reiterated but quite simple suggestion that a list of Northern Ireland papers analogous to the list of European Community papers be circulated to all Members so that they may apply for them?

Mr. Rees: I shall certainly do all I can to help in that respect. I certainly had no problems when I was in opposition about getting all the papers on Northern Ireland that I wanted. It is a matter of going to the Library and having a look. I shall do what I can to help. However, I do not think that this gets to the nub of the very real problems that, I accept, are being raised about direct rule. For instance, I wish that the problems of education in Northern Ireland could be discussed. It may he seen, indeed, to be more than apposite to the problems of Northern Ireland. The opportunities exist, but they are not taken.

Industrial Development

Mr. Hardy: asked the Secretary of State for Northern Ireland what has been the amount spent per head on the promotion and provision of industrial development in Northern Ireland during the last two years.

Mr. Moyle: I understand my hon. Friend is referring to the amount spent per head of population in Northern Ireland.
The total amount spent on industrial development, including capital assistance towards re-investment, between 1st April 1974 and 31st March 1976 was, on the basis of the 1971 census, £86·50 per head of population.

Mr. Hardy: Does my hon. Friend consider that the people of Northern Ireland are adequately aware of the fact that in this important field, as in others, they are given markedly greater opportunity than that enjoyed by citizens in the rest of the British Isles? If he is not so satisfied, will he ensure that these benefits are repeatedly explained, perhaps in order to increase the revulsion against violence which has already been mentioned?

Mr. Moyle: I am satisfied that the people of Northern Ireland are to a large extent aware that they get a better deal in these respects than do most other sections of the United Kingdom. My hon. Friend's point will be borne in mind and publicised to them.

Mr. McCusker: On what basis is the hon. Gentleman able to make those comments? Does he not agree that for any meaningful comment to be made on those figures we need equivalent figures for other peripheral deprived regions? Does he have those figures?

Mr. Moyle: The hon. Gentleman's last question would be better addressed to my right hon. Friend the Secretary of State for Industry. There is no doubt that far more aspects of industrial promotion are the subject of Government support in Northern Ireland than in other parts of the United Kingdom. If the hon. Gentleman wished, I could provide him with a list, if he has not got the pamphlet from my Department of Commerce.

Mr. Fernyhough: As my hon. Friend says that £86 per head is spent on industrial development in Northern Ireland, and as I represent part of the North-East of England, which has had problems similar to those of Northern Ireland, may I ask what is the comparable figure for the North-East?

Mr. Moyle: I cannot tell my right hon. Friend the comparable figure for the North-East. He could obtain that by putting a Question to my right hon. Friend the Secretary of State for Industry. The problems in the North-East are not quite comparable with those in Northern Ireland. As well as a security problem, in Northern Ireland there is the periphery problem.

Illegal Organisations

Mr. Wm. Ross: asked the Secretary of State for Northern Ireland, if he has any proposals for strengthening the law relating to membership of illegal organisations; and if he will make a statement.

Mr. Merlyn Rees: By virtue of Section 19 of the Northern Ireland (Emergency Provisions) Act 1973 it is a criminal offence to belong or profess to belong to a proscribed organisation. The problem in securing convictions is that of evi-

dence not a deficiency in the law. I am not satisfied that changes in the rules of evidence would be justified.

Mr. Ross: I thank the right hon. Gentleman for that reply. However, is he aware that in view of the continuing level of violence many people in Northern Ireland feel that the law should be strengthened, and strengthened in much the same way as that which prevails in Eire, where there are special criminal courts for dealing with these people? In the case of Martin McGuinness, my constituents believe that such a strengthening of the law is long overdue.

Mr. Rees: I would rather not get involved in individual cases. What matters is the evidence of proof of membership. As I have said in the House previously, if I were to listen to the gossip in Northern Ireland, I should find that the number of people who believe that other people belong to para-military organisations is large; but that does not stand up in a court of law, and quite properly.
The present Government will not introduce special courts. I am not prepared to put the RUC in the position of the Garda. What is done in the South is a matter for the South, in its own circumstances. To put the RUC to giving evidence in court saying "I have reason to believe", would turn the community against the RUC, and that has been one of our major problems in recent years.

Mr. Goodhart: Is the Secretary of State aware of the very deep sense of frustration among all ranks of the security forces about the difficulty of getting effective evidence against men who plan murder of the rank and file? What consideration is he giving to making really large sums of money available for information that would lead to the conviction of these leaders?

Mr. Rees: When I first arrived in Northern Ireland I found that sums as large as £50,000 were available for information, but they were not taken up. Hon. Members must consider the history of informers in the Northern Irish situation. If, as the hon. Gentleman has done, one visits areas and sees painted on walls advice about what will be done to informers, one can appreciate that it is far better to handle matters in the present


way now that information is coming. Certainly in recent weeks we are getting higher up the hierarchy in para-military organisations. The hon. Gentleman is absolutely right. It is the "godfathers" that we should like to have locked up. It is good to catch 16-year-olds firing Armalite rifles, but it is the organisers who are the men we want.

Mr. Watkinson: Does my right hon. Friend propose to take any action in relation to the criminal injuries legislation to prevent damages from being awarded to members of illegal organisations under that legislation?

Mr. Rees: I published a Written Answer yesterday, and I must not get involved in sub judice cases. If my hon. Friend would care to look at that answer and see the details of the legislation as it is, I think that he will find that the involvement point is met. However, on both of the Acts that I have to operate, under which the decisions are taken by the courts and not by me—not by a criminal injuries board but by the courts—certainly I can only say that there are times when decisions are as upsetting to me as they are to hon. Members. But the decisions are taken by the courts. I hope to amend the legislation when I get reports from the working party.

Mr. Neave: Will the right hon. Gentleman confirm that now that detention is ended, an unspecified number of former detainees are becoming reinvolved in terrorism? For that reason this Question is very important, and the security forces need legal powers to bring people before the courts. Would not one solution be to amend the laws of evidence and the onus of proof with regard to membership of illegal organisations so as to strengthen the whole position of the law in this regard?

Mr. Rees: It is not only ex-detainees who return to violence. It is also ex-prisoners who have been properly sentenced who do so, when they come out. It is not just a matter of ex-detainees. I am looking at this problem. However, unless we can get in Northern Ireland a respect for the law by all the community, we shall not win through. Playing about with the law might sometimes be a means of dealing with our own frustrations, but I am absolutely con-

vinced that it is only through the rule of law that we shall win through. Perhaps if it had been nearer the rule of law in the past we should not have had the problems that we have now.

Housing Executive

Mr. Carson: asked the Secretary of State for Northern Ireland how many housing executive tenants, from the introduction of the rent rebate scheme to 31st March 1976, have made application for rent rebate; and how many have qualified.

Mr. Concannon: I am advised by the Northern Ireland Housing Executive that at 31st March 1976 18,985 tenants had applied for rent rebates. At this date 11,815 tenants were receiving rebates and 1,128 applications were being processed.

Mr. Carson: I thank the Minister for that reply. Does he agree that in Northern Ireland there is a large proportion of low wage earners? Could he give an assurance that the rent rebate scheme will be based on net rather than gross income?

Mr. Concannon: The scheme in Northern Ireland is on an exact parallel with that in the United Kingdom. Because there is a higher proportion of low wage earners in Northern Ireland, there should be more people on rent rebates than there are. I regret that they are not coming forward in greater numbers.

Mr. Fitt: As the people already in debt to the Northern Ireland Executive do not qualify for the scheme, will my hon. Friend say how many people in Northern Ireland are on rent strike and are deliberately not paying rent? Can he give a list of the various estates involved, particularly in Belfast, so that we can estimate the number of people who are deliberately not paying rent?

Mr. Concannon: Finding out who are the original rent strikers is difficult. The number is now so low that it is not worth sorting out. There has been a change in the number of rent defaulters which is now small compared with what it was.

Mr. Wm. Ross: Will the Minister indicate the percentage of squatters who would otherwise qualify for rent rebate?

Mr. Concannon: Squatters do not qualify for rent rebate.

Employment Prospects

Mr. Kilfedder: asked the Secretary of State for Northern Ireland if he will make a statement about employment prospects in the Province.

Mr. Moyle: A precise forecast of employment prospects is not possible. In Northern Ireland they will depend to a considerable extent upon an upturn at national level. The extent to which Northern Ireland participates in the upturn will be heavily influenced by the political stability of the Province. At present the Government are taking all possible steps consistent with current economic policy to maintain employment and to create or promote new jobs. In addition an exercise to re-assess the economic and industrial strategy of the Province over the next few years is currently in hand.

Mr. Kilfedder: Does the Minister realise that potential employers see that Government activity in Northern Ireland is closing down, or at least not helping to keep open, the Rolls-Royce factory at Dundonald and three defence establishments in Northern Ireland? They believe, as a result, that the Government have no confidence in Northern Ireland. Have not the Government a duty to show the world that they have confidence in the people of Northern Ireland and that they intend to keep those jobs going?

Mr. Moyle: The Government are not reponsible for closing down the Rolls-Royce factory: that was a decision by the company. As for the closure of the defence establishments, it is right for people to look at the whole of Government involvement in Northern Ireland industry. The substantial sums that we are offering to people who settle in the Province and that they are spending there should be sufficient indication of the Government's confidence.

Mr. Bradford: Is the Minister aware that cavity wall insulators have been afforded the right to operate in Great Britain since October 1975 under the Health and Safety at Work etc. Act? Should not the same right be afforded to cavity wall insulators in Northern Ireland?

Mr. Moyle: We intend to apply the regulations to Northern Ireland as soon

as possible. The delays have been necessary because of the need to ensure proper consultations.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Sugar Refineries

Mr. Teddy Taylor: asked the Minister of Agriculture, Fisheries and Food if he will make a further statement on the reorganisation of British sugar refineries.

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop): Consultations with the cane refinery companies and workers and with the British Sugar Corporation are continuing and I cannot yet add anything to my answer to the hon. Member on 18th March.

Mr. Taylor: Has the Minister seen the joint paper published by Tate & Lyle and Manbre and Garton which shows that some sugar refiners will have to close and several hundreds of jobs will be lost because of the EEC restrictions on imports of cane sugar? How many jobs does he think will be lost, and where?

Mr. Bishop: My right hon. Friend has been in close touch over a period of time with the trade unions, with Manbre and Garton and with Tate & Lyle on this matter. We are considering the proposals and hope to come to decisions by the end of May. We are involved in close discussions. The hon. Gentleman will know of the proposals by the two firms. The effect on lay-offs and employment will depend on the conclusions.

PRIME MINISTER (BROADCASTS)

Mr. Canavan: asked the Prime Minister how many Ministerial broadcasts he has made since his appointment.

The Prime Minister (Mr. James Callaghan): One.

Mr. Canavan: Does the Prime Minister remember making in his broadcast on 5th April a reference to the fact that he could not promise any real improvement in living standards for some time? Can he elaborate on that? Can people


on low incomes expect any improvement in living standards before the next General Election, particularly in view of the Labour Party's manifesto promise that there would be an irreversible shift in the balance of wealth in favour of working people and their families?

The Prime Minister: The events of 5th April will be constantly in my mind and I doubt that I shall ever forget that day. The Budget was intended to protect families, especially this year, against the fall in the standard of life which this country is enjoying—if that is the proper word to use. That is an essential condition for getting us back into the position where the country will be able to enjoy an improved standard of life. Our first task is to ensure that sacrifices are fairly borne among all sections of the community.

Mrs. Thatcher: Does the Prime Minister recollect that in his last ministerial broadcast he said that he would root out injustices and seek to put them right wherever he could? Will he tell the House whether he approves the sequence of events which led the Government to have a majority on Standing Committees, when they have only a minority in the House?

The Prime Minister: I have been studying "Erskine May" while sitting here listening to questions, and it is an interesting document. I understand that we are to have a debate on the matter, although my right hon. Friend the Leader of the House will no doubt want to discuss that later. There is one consideration which needs to be taken into account. If the House has made a decision on Second Reading and therefore on the principle of the Bill, what does the House think should be the composition of the Committee set up to carry through the principles which the House has approved?

Mrs. Thatcher: In that case, is the Prime Minister aware that he is totally repudiating what the Leader of the House said just before Easter, when on 13th April he said that in future Committees must reflect the numbers in the House of Commons? Is the Prime Minister repudiating that?

The Prime Minister: I am not repudiating it: I am adding to it. There is more than one principle at stake here.

Mr. Tebbit: Twister.

The Prime Minister: The right hon. Lady has not addressed herself to

whether she believes that the details of a Bill which has been given a Second Reading by the House should be examined by a Committee to enable those principles to be carried through.

Mr. Ward: Will my right hon. Friend take an early opportunity not only to explain to the public in a ministerial broadcast his intention to carry on doing the job for which we were elected, to 1979 if necessary, but to deal with the growing public disquiet about the admission by British Petroleum that it made payments to political parties in Italy?

The Prime Minister: I hope that the question of a General Election is put at rest for the time being. If the Government were unable to govern, and if they were unable to get their legislation through. a different situation would clearly arise. Therefore, we shall just have to see how we go.
The question of BP is a serious matter, although the matter is obviously not limited to BP. I have been giving consideration to it with my right hon. Friend the Chancellor of the Exchequer, and I hope that in due course a statement will be made about it.

Mr. Thorpe: Having regard to Standing Order 62(2) I am surprised to note that the Prime Minister is not well aware of it, so perhaps I may elucidate for his benefit: it deals with the regard which the Committee of Selection must have to the composition of the House when it is making appointments to Standing Committees. Are we to take it from the Prime Minister's earlier answer that he believes that that Standing Order—and three seconds ago he was apparently asking what it was—has been complied with by the events of yesterday? Is he aware that the doctrine he enunciated would mean that many people who might wish to support the Second Reading of a Bill would not do so if they thought that the Committee stage thereafter would be rigged?

The Prime Minister: The Government have no influence on, and have played no part in, the decision of the Committee of Selection. [HON. MEMBERS: "Rubbish."] My hon. Friend the Member for Thurrock (Mr. Delargy), who has been a Member for 31 years, is responsible for what is done in that Committee. I understand that a debate will be arranged later,


and then it will be for my hon. Friend to indicate the Committee's position and for the Government to indicate theirs. In the meantime, I suggest that the Opposition get over a little of their synthetic indignation.

Mr. Whitelaw: Is the Prime Minister aware that in six years as Opposition Chief Whip and two years as Leader of the House I never heard the principle that he has just enunciated? The Standing Order to which the right hon. Member for Devon, North (Mr. Thorpe) referred has always been the principle of the Committee of Selection. I hope that the Prime Minister will not start to introduce a totally new principle which has never been discussed through the usual channels.

The Prime Minister: I suggest that the House waits to hear what my hon. Friend the Member for Thurrock has to say. My right hon. Friend the Lord President will no doubt be making a statement about future business in due course. I repeat—and the right hon. Gentleman had better accept it from me —[HON. MEMBERS: "Oh."]—if there are to be the relations between us in the future that have existed in the past—[HON. MEMBERS: "Oh."]—that the Government have played no part in the work of the Committee of Selection. It is for the Chairman of the Committee to indicate its position. Now will the right hon. Gentleman please withdraw any reflections of that kind?

Mr. Whitelaw: Is it not reasonable to suggest that the right hon. Gentleman is seeking to intimidate me? If that is his purpose, he will find that it is a very unwise course for him or anyone else to pursue. I do not withdraw one word. What I said was perfectly simple—that the right hon. Gentleman was producing a new principle of which I had never heard before. Of course, I accept that the Chairman of the Committee of Selection is entitled to tell us why he did what he did. But I am equally entitled to tell the Prime Minister that he has introduced a new principle, without my being told that I am to be intimidated.

The Prime Minister: I have rarely met anyone who is less capable of being intimidated than the right hon. Gentleman, even in his most offensive moods. I do not expect to do that. What I am

telling the right hon. Gentleman—and I think that he has accepted it—is that the Government have played no part in this. If that cannot be accepted, it will be a bad thing for relations between the two sides of the House. Therefore, I hope that it is accepted.
On the question of the principle, it seems to me an extraordinary failure to understand the common elements of democratic practice to suggest that when a Bill has been given a Second Reading on principle, it should not be allowed to go through Committee.

TUC AND CBI

Mr. Blaker: asked the Prime Minister when he next expects to meet the TUC and the CBI.

Mr. Adley: asked the Prime Minister when he next intends to meet the TUC and CBI.

The Prime Minister: I hope to meet representatives of both the TUC and the CBI at the next meeting of the National Economic Development Council.

Mr. Blaker: Whilst we all admire the Prime Minister's ingenuity in finding new principles, will the right hon. Gentleman explain to the TUC and CBI, for which it is very relevant, how the Secretary of State for Energy can abstain in the National Executive Committee of the Labour Party on the Government's spending plans, with all the effect on international confidence that that has? Does not the principle of collective responsibility apply?

The Prime Minister: I am not finding new principles. I am restating old ones when I suggest that when the House has given a Bill a Second Reading, the Bill is supposed to be allowed to proceed in Committee. A similar principle applies to the doctrine of collective responsibility —that is, collective responsibility includes all Ministers, who must be willing to defend the Government's policies at all times.

Mr. Heffer: My right hon. Friend rightly said earlier that sacrifices should be fairly borne. Does he not agree that in the last period the trade unions have


fallen over backwards to accept sacrifices? Will he now clearly indicate that the other side of the coin is an extension of egalitarian principles and of public ownership—[Interruption]—and that the Opposition and their supporters in the country—big business—should also make their sacrifices?

The Prime Minister: I have repeatedly said—and I at once say again, despite the Opposition jeers—that the trade union movement is playing a most remarkable part at present. It ill behoves anyone on the Opposition Benches to jeer at what is being done.
On the rôle of the trade unions, it is true that the people of this country and trade unionists have accepted sacrifices, but these sacrifices—and this is why we stand where we do—are in the best interests of securing a new base from which we can build a productive economy. Only on that base would my right hon. Friends and I feel free to ask the people to make those sacrifices. That is why we shall endeavour to carry through the programme laid down in our manifesto.

Mr. Adley: If the TUC rejects the 3 per cent. pay limit, which the Government have said is imperative, will the Government cut by a similar percentage the proposed tax concessions? If they do so, will they tell the 10 million trade unionists who are members of the trade unions affiliated to the TUC whose fault it is that they are having their tax concessions cut?

The Prime Minister: The hon. Gentleman, as usual, is being helpful and I am grateful to him for the way in which he puts his remarks. We should first wait to see how those discussions turn out. The trade unions are trying to carry their members into a situation in which they will freely and voluntarily accept a level of wage increases this year that is inconceivably low by comparison with the situation a year ago, when nobody would have thought that possible. What I am anxious to do, as I hope is the whole House, is to help the trade unions to achieve that.

Mr. Spriggs: What special steps are the Government prepared to take to help school leavers, particularly in view of

the fears about unemployment in the Merseyside area, to obtain jobs in the next year?

The Prime Minister: As the House knows, the Budget Statement contained a doubling of the temporary employment subsidy. I know that my right hon. Friend the Secretary of State for Employment has been looking especially at the subject of school leavers, not only as to the situation on Merseyside, but in other respects. I believe that he is now undertaking discussions on this matter.

Mr. Pardoe: Will the Prime Minister reconsider what he said a few moments ago? Is he aware that nobody in any part of the House will doubt that the trade unions are playing a considerable part at present? What some of us are concerned about is the part played by Parliament. What proposals have the Government to restore the power of representative parliamentary democracy?

The Prime Minister: It would be open to Parliament, in the light of any voluntary agreement reached by the trade unions, to overturn it if it were foolish enough to do so. What the Opposition have totally failed to understand is that in these matters of Budget judgment for the year ahead the level of earnings is one of the central features to be considered. No Chancellor of the Exchequer can afford to ignore it when deciding on the other balancing factors in his Budget. Therefore, if a sensible agreement were reached with the trade unions, it would be foolish for anybody to seek to overturn it, because that would throw out the balance of the Budget as a whole.

Sir David Renton: Although I understand the Government's reasons for entering into these wage negotiations with the TUC, may I ask the Prime Minister who, if anybody, is representing the interests of those who will have to pay the wage increases?

The Prime Minister: Obviously, it will be for employers to decide what can be paid at the end of the day after negotiations with the trade unions. That is not a new principle but an old one. Last year some employers were unable to pay the full amount that had been agreed, but this is a process of collective bargaining.

BUSINESS OF THE HOUSE

Mrs. Thatcher: Will the Leader of the House please state next week's business?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 3RD MAY—Second Reading of the Finance Bill.
Debate on appointments by the Committee of Selection.
TUESDAY 4TH MAY—Second Reading of the Rent (Agriculture) Bill.
Remaining stages of the Atomic Energy Authority (Special Constables) Bill and of the Land Drainage (Amendment) Bill [Lords.]
WEDNESDAY 5TH MAY—Progress on the Report stage of the Agriculture (Miscellaneous Provisions) Bill.
THURSDAY 6TH MAY—Supply [19th Allotted Day]: There will be a debate on the Army, on a motion for the Adjournment of the House.
FRIDAY 7TH MAY—Private Members' Bills.
MONDAY 10TH MAY—Until about 7 o'clock, remaining stages of the Local Government (Miscellaneous Provisions) Bill.
Afterwards, completion of the remaining stages of the Agriculture (Miscellaneous Provisions) Bill.

Mrs. Thatcher: Will the debate on Monday, following the conclusion of the debate on the Second Reading of the Finance Bill, take place on the motion tabled by my right hon. Friends and myself? Furthermore, so that we may be better able to debate the matter thoroughly, will the right hon. Gentleman say on what provision in "Erskine May" the Prime Minister was relying when he referred to this subject and enunciated a totally different principle from any we have ever known, and, indeed, a principle which appears to be wholly at variance with the precedents established from February to October 1974?

Mr. Foot: I suggest that the best way to deal with all these questions, including that put by the right hon. Lady the

Leader Opposition, is to debate the matter on Monday not on the motion tabled by the right hon. Lady and her colleagues but on the Adjournment of the House. [HON. MEMBERS: "NO."] It will then be open to the Chairman of the Committee of Selection to report to the House on the effects of the decision of his Committee. The House will then, because of his report, be in a better position to judge the matter.
If I may be impertinent enough to say so, I believe that the mistake made by the Opposition in tabling their motion is that they have prejudged the matter before the House has had a chance to hear the Chairman's views. I hope that the House will regard my suggestion as the best way of proceeding with this matter. We have provided the earliest possible time for the matter to be debated. I recognise the importance of the matter. I hope that following Monday's debate everybody in the House will understand the situation very much better.

Mr. George Cunningham: Is it not a fact that the Committee set up to consider the Abortion Act reflected more or less the vote on Second Reading, much to the annoyance of some hon. Members on this side of the House, and that that decision was approved by many Opposition Members?

Mr. Foot: My hon. Friend draws attention to one factor in the situation. There are several factors which no doubt gave rise to the decision taken by the Committee of Selection. One matter which did not arise was any representation by Her Majesty's Government. I confirm what my right hon. Friend the Prime Minister said and repudiate the suggestion made by the Leader of the Liberal Party that there was any rigging whatsoever. I repeat that there are a number of factors to be taken into consideration, and I believe that before the House makes up its mind we should hear what the Chairman of the Committee has to say.

Mr. Thorpe: Will the Lord President accept that of course I accept that the votes of the five Labour Members—the four plus the Chairman's casting vote were all coincidentally in the same direction? We accept that no Whip was on and that it was pure coincidence that they all voted the same way. Will the


right hon. Gentleman ensure that the debate is allowed to go wide enough not merely to deal with the matters that occurred on 28th April but so that he may be able to deal with the composition of the Committee of Selection? Some of us believe that the composition should be representative of the balance of seats in the House rather than merely of the two sides of the House, which at present it is not. The position takes no account of the 36 Members of Parliament who belong to four Opposition parties not represented on the Committee.

Mr. Foot: Since the debate is to take place on the Adjournment on the recommendation of the Government, there will be a wide opportunity for all such matters to be raised. That is a much better way of proceeding than by way of a debate on the lines of the motion tabled by the right hon. Lady and her right hon. and hon. Friends or, indeed, the amendment tabled by the Liberal Party. I am glad to have a full repudiation from the Leader of the Liberal Party of any possibility of rigging. I hope that that fact will be widely reported.

Mr. Cryer: Will my right hon. Friend consider, as a matter of great urgency, giving time next week for the House to debate the secret payments by BP to political parties abroad? Does he not agree that it is scandalous that the accounts of BP failed to reveal these payments and that the lamentable excuse offered was that company legislation does not require political contributions to be revealed? Does he not agree—

Mr. Speaker: Order. The hon. Gentleman must not state his case. He must ask only whether the House can debate the matter.

Mr. Cryer: May I ask whether we may debate the matter, if not next week, at a very early stage?

Mr. Foot: I agree with my hon. Friend about the importance of the matter. I cannot promise a debate. There are some Questions tabled to my right hon. Friend the Chancellor of the Exchequer for answer on Monday. I suggest that that is the occasion when the House should consider the matter.

Mr. Peyton: May I ask the Leader of the House to read again his own words

in the debate on the Tuesday before Easter, as reported at column 1219 of the Official Report, and say whether he fully endorses them or wishes to resile from them now that they have become inconvenient? Would it not be quite sufficient for the right hon. Gentleman to allow his hon. Friend the Chairman of the Committee of Selection to make a personal statement on this matter? This would then clear it. Will the right hon. Gentleman assure us that we shall have time to debate the motion in the name of my right hon. Friend the Leader of the Opposition and an opportunity to vote upon it?

Mr. Foot: Concerning the words I used in the debate in reply to the right hon. Gentleman just before the recess, I do not withdraw anything there. I believe that those words were a perfectly correct statement of the Standing Order as it appears in "Erskine May". I do not withdraw a single word that I said there. Indeed, I believe that it governs the present situation as well. We can debate that matter.
As for saying that it could be dealt with by a personal statement from my hon. Friend the Member for Thurrock (Mr. Delargy), that is not the position at all. It is a question of the constitutional rights of all Committees of the House. If my hon. Friend catches your eye in the Adjournment debate on Monday, Mr. Speaker, he will, of course, be speaking on behalf of his Committee which has reached this decision. The House of Commons is wrong, in my opinion, in jumping to a conclusion on this matter and in putting motions on the Order Paper without even hearing what my hon. Friend has to say on the question.
As to the right hon. Gentleman's question to me about the possibility of voting on the motion, various Members in different parts of the House will be able to judge whether they wish to proceed with any particular motions. The Government hope that following the discussion we have on Monday, right hon. and hon. Members on the Opposition side will be prepared to withdraw their motion. But, if not, the House will have to find time for debate and be able to vote on such a matter. I still feel that the best way for the House of Commons to deal with this matter is to hear what is said in the debate and for all hon. Members


faithfully to make up their minds on the basis of what my hon. Friend says.

Mr. Peyton: The right hon. Gentleman doubtless means that he will find time for the Opposition's motion to be debated before these Committees start their deliberations.

Mr. Foot: I fully accept what the right hon. Gentleman says. Therefore, in order to ensure that no Committee shall start under this procedure until the House of Commons itself has been able to decide the matter, I suggest that the Committee that might have started on Tuesday should not start on Tuesday. I think that that has already been indicated to right hon. and hon. Members opposite. It is a perfectly proper way in which to proceed. It would be absurd for the Committees to go ahead while we are still uncertain what the House itself is deciding. Far from denying the House of Commons any right to settle the matter, I am recommending a better way of settling it than that proposed by the official Opposition. Let us listen to the case first before we make the judgment.

Mr. William Hamilton: Before the debate on the matter on Monday, will my right hon. Friend look up the record of the former Leader of the House in the Tory Administration to see how he rigged the Scottish Standing Committees of that day? My right hon. Friend will find an interesting precedent—if precedent it be—on this matter.
On a related subject, will my right hon. Friend explain the delay in the setting up of the Committee concerning the procedures of the whole House, which has been unduly delayed, and also the delay in giving the names of the Royal Commission dealing with the legal profession? I hope that my right hon. Friend will give an undertaking that he has not been got at by the Members of the House who are in the legal profession.

Mr. Foot: I give my hon. Friend an absolute undertaking that I have not been got at by any section of the House in the sense that he was describing. I agree that we have to deal speedily with the matter of the Committees dealing with the procedures of the House. If the House would give me a little longer to decide how we should proceed, and whether we should have two Committees

looking into these matters, I should be grateful.
As to the Committee of Selection, I hope that my hon. Friend will not tempt me into making attacks on the opposite side in regard to these matters, but it seems to me that, from the evidence to which he was referring, if he happens to be correct, he has material for his best speech for a long time—and on our side for a change.

Sir J. Langford-Holt: The Leader of the House has emphasised the importance of this issue. He said that it affected the constitutional rights of every Member of the House. In view of that, will he assure the House that there will be no question of any time limit on the debate on Monday evening?

Mr. Foot: We were suggesting that the Adjournment debate should be for one and a half hours. [Interruption.] The official Opposition can state their own view, but I gather that they did not have an objection to a debate of that character. [Interruption.] If there is any desire for a somewhat longer debate, I am sure that we would take that into account. [Interruption.] Some of my hon. Friends may disagree with me, but I believe that it is right that there should be an opportunity for the House of Commons to discuss the matter properly. If the House of Commons wants a bit longer to discuss the matter, I shall not object.
I have proposed a way of dealing first with what may be said by my hon. Friend the Member for Thurrock (Mr. Delargy). I believe that the atmosphere may be very much changed when Members in all parts of the House are in full possession of the facts. We ought to know the facts before we pass judgment.

Mr. Skinner: Will my right hon. Friend accept that many of us on this side feel that it would be a better use of the hour and a half proposed for Monday night if we were not to debate the decision of the Committee of Selection—which we feel is a sensible decision—but to debate the illegal currency dealings on the Stock Exchange? Will my right hon. Friend and his right hon. Friends agree that we should set up a comprehensive inquiry into this matter and invite the Fraud Squad to investigate it, so that anybody with the idea of leaving this country with


a suitcase full of cash will know that the Government intend to prevent this happening?

Mr. Foot: The matter to which my hon. Friend refers is being investigated, and there may be a point at which the House will want to debate it, but I do not think that is a suggestion which can be put into operation on Monday.
I think it is right that the House of Commons should have the opportunity to debate the procedure on which these matters are based so that we may have general agreement about the way in which to proceed. It is better for the House of Commons as a whole that this should be done. What I have suggested is, I believe, a better way of dealing with the matter than that put forward by the official Opposition.

Mr. Gordon Wilson: Will the Leader of the House accept that the selection of Committees is being rigged at the present time in relation to the Scottish Standing Committees? Will he accept that the Scottish Standing Committees do not reflect the representation of Scottish Members of Parliament and that they reflect the English rather than the Scottish representation?
Secondly, will the right hon. Gentleman consider that the debate on the motion on Monday should take into account the fact that the SNP's recommendations for Committee membership seem to be disregarded by the Committee of Selection? Would it not be simpler if we debated the subject on a simple motion to discharge the Committee of Selection?

Mr. Foot: The word "rigged", as sometimes used in the House, can be understood by hon. Members as a very modest word, but it is sometimes put into the headlines as if it has a stronger meaning. I repudiate entirely the suggestion that the Committee of Selection has in any sense whatsoever been guilty of rigging. I believe that it is very foolish of hon. Members in any quarter of the House to sling around charges of that character. But all the general questions raised by the hon. Gentleman would, I presume, be in order in the debate on Monday.

Mr. Thorpe: Is the Leader of the House aware that it is outrageous on the one hand to say that this is a major constitutional issue and then to suggest that the House should have only an hour and a half to discuss it, which is roughly the time that we would have for a Prayer against some Statutory Instrument or Order from the Common Market, of which I am sure he would approve? This is not good enough. If it is a major constitutional issue, as many of us believe—and the mere fact that the right hon. Gentleman has deferred the sitting of a Standing Committee indicates that it is—surely he must offer us nothing short of a full day's debate.

Mr. Foot: I do not think that the right hon. Gentleman has made a sensible proposal about the way that we should deal with this matter. Let us first see what happens when the House is in full possession of the facts, then let us see whether we proceed to a further debate. I have already indicated that if the official Opposition thought, following the debate, that they were not satisfied, there would be an opportunity for a further debate. [HON. MEMBERS: "When?"] At a very early stage. It would have to be dealt with very early, and possibly Tuesday would be the best day for dealing with it. But I think that it is absurd for the right hon. Gentleman and others to say that they will pass judgment on the matter before they have even heard what the Chairman of the Committee, representing his Committee, has to say on the subject.

Mr. Jay: When are we to have a further debate on the handling of EEC secondary legislation as my right hon. Friend promised after the recent muddle over the skimmed milk Order?

Mr. Foot: There is to be one of the periodical debates on EEC legislation within a measurable number of weeks. I am not certain how many weeks exactly, but there will be a debate some weeks hence, and conceivably the matter could be dealt with then.

Mr. Spearing: Oh!

Mr. Foot: If we find that there are a great many subjects likely to be involved covering general policy questions in that debate, certainly we shall be prepared to provide a period after 10 o'clock


—we have to fit it into the general programme—when we could return afresh to the procedural point on which we had discussions before, and that would be as soon as we could arrange it.

Mr. Tebbit: May I put two matters to the Leader of the House? First, is the reason for putting on the debate on the Committee of Selection affair late at night that that is the traditional time for doing dishonest deeds? Secondly, when shall we get the promised debate on the proposed increase in school meal charges which was presaged in the White Paper on Public Expenditure, if that still has any validity?

Mr. Foot: On the hon. Gentleman's second point, no date is fixed for the debate on that Order to take place. But I shall let the House know as soon as we know when the debate is likely to take place. As for the hon. Gentleman's comment about the timing of Monday's debate, I repudiate entirely his suggestion. The fact is that it is the earliest time, apart from the debate on the Finance Bill— and that is also extremely urgent—that the House can debate the matter. Instead of being denounced for it, I should have expected congratulations, even from the hon. Member for Chingford (Mr. Tebbit).

Mr. Kilroy-Silk: Is my right hon. Friend aware that it is customary for changes in prison rules to be debated in this Chamber? Will he therefore give an assurance that there will be a debate on the Floor of the House on Statutory Instrument No. 503?

Mr. Foot: I cannot give an absolute assurance that we can debate it on the Floor of the House, although I know that that is the desire of many of my hon. Friends. In view of the pressure of time, I cannot give that assurance. It could be debated upstairs. If that is not thought satisfactory, I am afraid that any debate on the Floor of the House will have to be postponed until later.

Mr. Powell: When does the right hon. Gentleman expect to find time for the debate, which he has accepted to be necessary —it need not be a lengthy debate—on the motion with regard to the use of Standing Order No. 22?
[That in the opinion of this House the use of Standing Order No. 22 on 13th April 1976 ought not to be cited or drawn into precedent on any future occasion.]

Mr. Foot: I have, of course, seen the motion on the Order Paper. As I said when I answered business questions before, I think that it raises an important question. Although I do not think that the right hon. Gentleman wishes to reflect on the decision of the Chair, as it stands the motion could be so interpreted. A motion of that character should be either withdrawn from the Order Paper or debated at an early date and removed by such a debate We are agreeable to an arrangement next week —I suggest Thursday evening—when that issue might be debated. That would enable us to dispose of it speedily. But I agree with the right hon. Gentleman that it is essential that the House itself should have the chance of dealing with it.

Mr. Atkinson: Does my right hon. Friend recall my letter to him last week calling for an inquiry into the Bank of England and the relationship between the Governor and this Government, and also the fixing of the minimum lending rate, together with a debate about the whole question of currency dealing in the City of London? Does he not agree that Monday's debate on the Second Reading of the Finance Bill is not a suitable occasion for the inclusion of these matters? Therefore, will he urgently fix a time when we can have a full debate on the whole question of currency dealing and the fixing of the parity of the pound?

Mr. Foot: I recall my hon. Friend's letter to me, and I recognise the importance of all the subjects he has listed, but I cannot promise a speedy debate on the matters. I believe that many of these questions can be raised in the debate on Monday and in some of the subsequent debates that the House will have over the next two or three weeks.

Sir David Renton: With regard to the Committee of Selection, can the Leader of the House explain the rather strange position which has arisen? On the one hand we have a motion tabled by my right hon. Friend the Leader of the Opposition, supported by her right hon.


and hon. Friends, a motion of great importance which I think normally would be debated in Government time. On the other hand the Leader of the House says that the House will not be in possession of the facts until we have debated the matter first on the Adjournment. No doubt Oppositions always like two bites at the cherry, which is what we hope to have in view of the right hon. Gentleman's suggestion. But would not it be better to go straight to the point and have a full day's debate on my right hon. Friend's motion?

Mr. Foot: I have already explained the reasons why I do not believe that to be the best procedure. Others may take a different view, of course. I think it is better that the House should know the facts as reported by the Chairman of the Committee, on behalf of his Committee, before making up its mind. The motion prejudges the issue altogether. I believe that it is better to have the debate in the circumstances and on the basis that we have announced.

Mr. English: Is it true that the Opposition are blocking all changes in the membership of Select Committees until this Standing Committee argument has been settled? Is it also the case that most of those changes result from recent ministerial appointments? If that be the case, does my right hon. Friend agree that the Opposition are trying to secure themselves majorities on Select Committees by rigging them?

Mr. Foot: I am not aware that such action is being taken by the Opposition. I have not heard about such action. We shall have to see what develops.

Mr. Lawson: Although I am grateful to the Leader of the House, as many right hon. and hon. Members will be, for his promise of a full day's debate on Tuesday on the motion tabled by my right hon. Friend the Leader of the Opposition, does he not agree that an hour and a half on Monday night for the debate on the statement by the Chairman of the Committee of Selection is wholly inadequate? Does not the right hon. Gentleman want to preserve the last vestiges of his reputation as a parliamentarian?

Mr. Foot: I do not think that any hon. Member heard me say that I would

promise a full day's debate on this matter on Tuesday. I think that, probably, the hon. Gentleman himself heard me correctly. I made no such promise. I believe that what I have done is the best way of proceeding. If the House does not like it, we can see what happens afterwards. What we have done is to give the House of Commons a chance to discuss the whole of this matter, quite freely, at the earliest possible opportunity. Instead of being criticised for that, I feel that I should be congratulated.

Mr. John Garrett: When will my right hon. Friend announce the membership, and the start, of the Committee to examine the procedures and practices of the House? Did I gather from his reply to my hon. Friend the Member for Fife, Central (Mr. Hamilton) that this matter is now being reconsidered by the Government? Is my right hon. Friend aware that some of us think that this is a very important matter indeed?

Mr. Foot: I fully understand the importance which my hon. Friend and many other hon. Members attach to this question. I am just asking for a few more days before we decide how we should proceed on the matter. I am not suggesting that the whole question should be reconsidered but I should like a few more days before I make some statement about it. I hope the House will agree with what we suggest then, but we shall want to reach some more detailed conclusions about it.

Mr. Baker: Is the Leader of the House aware that the Finance Bill on Monday is exempted business which may run well beyond 10 o'clock, to midnight or later? For a major constitutional issue such as this to come up at such a late hour is totally unacceptable. If, as he said, he wants the House of Commons to debate this matter at the earliest possible opportunity, the first possible opportunity is 3·30 on Monday afternoon. Should he not put the debate forward to that time?

Mr. Foot: I and, I believe, many hon. Members would regard what the hon. Gentleman said as unreasonable—that the House should scrap the Finance Bill debate in order to proceed to this discussion—important though this matter is.
I have offered the first available time—apart from the Finance Bill—to the House for this discussion, and I hope the House will listen and ascertain what the situation is before it jumps to any further conclusions.

Mr. Faulds: I do not know what influence my right hon. Friend has in the new Government, but would he consider re-peopling the Services Committee because of the oddity of some of its recent decisions? Will he bear in mind that my services are always at the Government's command?

Mr. Foot: I gather that the latter situation, which my hon. Friend describes, has been the situation in recent weeks. I cannot understand how my right hon. Friend the Prime Minister was not fully aware of the fact. It must have been brought to his attention on several occasions. I will certainly take into account what my hon. Friend says about a matter in which he is an expert.

Mr. Grylls: Would the Leader of the House remember that he is the Leader of the whole House and not just acting for the Government? The Committee of Selection is a House of Commons matter, primarily. If he refuses to have a full-scale debate at a proper time and of a proper length, in which the whole House of Commons can take part, he will be defending the indefensible. Will he think again about his decision this afternoon and ensure that we have an early full-scale debate?

Mr. Foot: I do not see how the hon. Gentleman, or the House, can come to the conclusion which the hon. Gentleman has reached. What I have proposed is to deal with this matter as a House of Commons matter. What the right hon. Lady and her hon. Friends have done is to seek, by their motion, to deal with it on a strictly party basis. I hope that we can escape from that way of dealing with it and deal with it as a House of Commons question.

Mrs. Renée Short: My right hon. Friend's predecessor promised the House on four occasions that the Government's reply to the Select Committee on Expenditure Report on the working of the Children and Young Persons Act would be available shortly. I am won-

dering how shortly is "shortly". Can he say when that will be forthcoming? We have already had a debate on the subject without the benefit of that reply. As the Prime Minister has chosen to debase the currency of the whole area of the arts by appointing a Minister in the other place, who will reply to Questions on the arts in this House?

Mr. Foot: On my hon. Friend's last point, I assume, unless I have made an error, that replies to questions about the arts will be made by a spokesman from the Department of Education and Science.

Mrs.Short: Who?

Mr. Foot: I have no doubt that various spokesmen from the Department of Education and Science would reply on such matters. As for the earlier report to which my hon. Friend drew my attention, I have no further information to add to what has already been said but I will see that she gets an answer shortly—as soon as we can give it.

Mr. Geoffrey Finsberg: May I ask the right hon. Gentleman to reconsider what he said a few moments ago to the hon. Member for Fife, Central (Mr. Hamilton)? The Leader of the House—in this respect I do not think that we are interested in who holds that office—promised a statement about the establishment of a sessional Committee on Procedure before Easter. Is he now in a position to say whether a sessional Committee can be set up while the House and the Government give further consideration to the major Committee?

Mr. Foot: I quite agree that there is an obligation upon me to make as speedy as possible a statement on both these Committees.

Mr. Robin F. Cook: Would the Leader of the House advise the Minister who is to reply to the Army debate next week that some of his hon. Friends were concerned at reports last week that the Secretary of State was seeking arms sales to the Government of South Korea, and that some of us may seek to raise that in the debate in we catch Mr. Speaker's eye? Would my right hon. Friend consider whether a Committee of the House could review the guidelines on arms exports, which are now looking very tatty indeed?

Mr. Foot: I will certainly pass the point on to my hon. Friend. No doubt in the debate my hon. Friend will press the case for a special Committee if he has the opportunity, but I cannot make any promises about a Committee at the moment.

Mr. Gow: What is the objection to having this afternoon a debate on the decision of the Committee of Selection? Is the Lord President aware that, in view of the record of the Prime Minister as gerrymander-in-chief of the Boundary Commission, the reputation of the Government in this matter is very low already?

Hon. Members: Answer.

Mr. Foot: I did not think that it was necessary to reply to a foolish and insulting question.

Mr. Spearing: Will my right hon. Friend reconsider his initial reply to my right hon. Friend the Member for Battersea, North (Mr. Jay) in respect of the debate on EEC procedure? Would he not agree that it is in the best interests of this House to separate debates on substance from debates on procedure? A six-monthly sessional debate on EEC policies in general would not be the right time to discuss procedure. Since members of the Scrutiny Committee en bloc  have signed an Early-Day Motion on this subject, would this not be a suitable time to have a debate?

Mr. Foot: I think there is considerable force in what my hon. Friend says about having a separate debate on the procedural aspects. This is what we are inclined to do. I hope that, in the not too distant future, we shall be able to arrange a debate.

Mr. Marten: Reverting to the question about Monday night, there was some noise on this side, and I am not certain that I got it right. Can the right hon. Gentleman confirm that we shall initially have a debate on the Adjournment, which may run for longer than an hour and a half, and that, if the Opposition wish, they could then almost claim a proper debate on which we could have a vote, but not on the Adjournment?
On a more interesting matter, has the right hon. Gentleman noticed the two

motions on the dislike of people in this country for the evisceration of fowl? Since we had an assurance on 26th April 1972 that we need not follow that procedure if we did not want to, may we have a debate on that, too?

Mr.Foot: I think I have almost always agreed with the hon. Gentleman on the question of the evisceration of chickens, and it would be very melancholy if there were a divergence of interest between us on the subject. That does not mean to say that we can debate the matter next week, whether there is a divergence or not.
What I said was we should have the debate on the other matter on Monday. Our hope naturally is that there should be no further necessity for a debate but if it is believed, by the official Opposition or others, that a further debate is required, I believe that, on a matter of this significance, we would have to provide some time for it.

Mr. Lawson: The right hon. Gentleman said Tuesday.

Mr. Foot: I said that I thought that a convenient time was possibly Tuesday, again after 10 o'clock—[HON. MEMBERS: "Oh."] I have not suggested in any of the replies that I have given to Conservative Members that we were prepared to disrupt the timetable of next week to have the debate. I believe that the offer I have made to the House is perfectly proper and reasonable. I hope that it will be accepted, but, I repeat, I hope that the Opposition will listen to the case before they press for the judgment to be pronounced.

Mr. Peyton: Is not the right hon. Gentleman aware that, although he may have got his breath back, he is now galloping away from what he said earlier? Any suggestion that a second debate, if one is considered necessary, should take place at 10 o'clock at night or later is entirely novel and even more unacceptable.

Mr. Foot: Nothing that I said in my reply a minute or two ago in any way contradicted what I said earlier. I am sure the House will confirm that. What I am suggesting to the House is that we should debate this matter at an early time on Monday. I believe that the House should listen to what is said then


before it makes up its mind about what it is to do later.

Mr. Kilfedder: The right hon. Gentleman will recall how he and his colleagues were very liberal in their criticism of former Stormont Administrations for not stemming the tide of unemployment in the Province. Now that this Government, who are directly responsible for employment in the Province, have achieved the greatest number of men and women out of work in Northern Ireland in 30 years, would he arrange a debate to mark this sad occasion? In the meantime, would he persuade the Prime Minister to go to Northern Ireland to meet representatives of the workers?

Mr. Foot: Questions of unemployment are extremely serious, both in Northern Ireland and in other parts of the country. They have been debated in the House continually and I have no doubt that they will be debated over the weeks ahead. It is not true to say that the hon. Gentleman will not have the opportunity of raising such matters.

Mr. Peter Bottomley: May I remind the right hon. Gentleman that one of the arguments used by his right hon. Friends during the West Woolwich by-election last year was that they had to hold the seat so that they could retain control of the Committees? As the hon. Member representing the largest constituency Labour Party in the country, may I put it to the right hon. Gentleman that if there is a debate for an hour and a half on Monday evening, and if one allows 10 minutes to the hon. Member for Thurrock (Mr. Delargy), there will be less than 10 minutes for each of the other parties in the House?

Mr. Foot: Some very curious arguments must have been used in the hon. Member's by-election, which must account for his presence in the House. I have no knowledge that any such question was raised. I am sure that the debate will go perfectly well on Monday. I do not believe that it is too much to ask that the House should listen to what is said before pronouncing judgment on it.

Mr. Kenneth Lewis: Does the right hon. Gentleman realise that the Commit-

tee of Selection yesterday afternoon discussed this matter—there were not many of us—for over two hours? Therefore, how can an hour and a half on Monday night possibly be adequate for the House of Commons to discuss the same thing?

Mr. Foot: I hope that we shall be able to get through it in an hour and a half, but perhaps we can proceed a little faster if the hon. Member is a little less talkative than he was in the Committee. That might help the proceedings of the House. Anyway, let us see how the House proceeds to deal with this matter. My experience of the House of Commons suggests that it will pass judgment fairly on what is said and reported to it. It is because I believe that people should weigh the evidence before they reach their conclusions that I have criticised the Leader of the Opposition and her right hon. Friends for rushing in so hastily to put her motion on the Order Paper.

CLERK OF THE HOUSE AND LIBRARIAN RETIREMENTS)

Mr. Speaker: I have to make a statement to the House on an entirely different matter.
I have to inform the House that I have received letters from the Clerk of the House and from the Librarian about their forthcoming retirement. The letter from the Clerk of the House is in the following terms:
Dear Mr. Speaker,
I write in accordance with custom to let you know that I wish, at the end of June, to resign the patent of Clerk of the House of Commons which I have been honoured to hold since 1st January 1974, and to conclude more than forty-one years in the service of the House, in peace and war.
During this time I have served in twelve Parliaments and under seven Speakers. I have also been so fortunate as to visit a number of the Parliaments of the Commonwealth and to meet a large number of their Members and Clerks at Westminster.
Throughout my service I have deeply appreciated the courtesy, kindness and consideration which I have always received from the Chair and from Members of all parties. For this I am deeply grateful.
I would also like to express my warmest thanks for all the help I have received from those colleagues in all Departments with whom I have shared the unique privilege of working for the House of Commons.


The letter from the Librarian reads as follows:
Dear Mr. Speaker,
 I write to inform you of my wish, at the end of June, to retire from the office of Librarian of the House of Commons which I have had the honour to hold since 3rd September 1967.
I have had the great privilege of working in the Library for the last thirty years, and of watching its services grow as the use made of them by Members has grown. This growth could not have taken place without the support of Members in general, and of your Library Committee in particular, coupled with the tolerance and understanding of colleagues both inside and outside the Department of the Library.
For that, and for much else, I am and will remain deeply grateful.

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I am sure that the House will have learned with regret the news of the retirement of two of the most distinguished servants who have ever served this House of Commons. According to the normal practice, we shall have a motion on which we can express our views fully on this matter and I suggest that we should reserve our comments until then.

Mrs. Thatcher: I am very happy that we should reserve our main comments until then. Naturally, we are sorry that they are both retiring. Perhaps I might just say a preliminary "thank you" to both of them for their service and for their kindness and wish them well in their retirement.

Hon. Members: Hear, hear.

Mr. Speaker: Naturally I, too, should like to reserve some comments for the proper occasion.

SECRETARY OF STATE FOR ENERGY

Mr. Michael Latham: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the apparent breach of the principle of collective Cabinet responsibility by the Secretary of State for Energy in failing to oppose a motion criticising the Government's policy on public expenditure at a meeting of the National Executive Committee of the Labour Party in London on 28th April.

Let me say at once that I gave notice of my intention in this regard by telephone to one of the Secretary of State's private secretaries in his private office at 11·40 this morning, directly after I had submitted my application to you, Mr. Speaker. I stressed to the lady that she should notify the Secretary of State at once.
I respectfully submit to you, Sir, that this matter should receive priority, first, because it is manifestly specific. It deals with a specific, named incident. Second, it is important. I submit that nothing could be more important for the conduct of Cabinet government than that Ministers should firmly uphold ministerial policy on all occasions. Indeed, in a Written Reply to my hon. Friend the Member for Mid-Sussex (Mr. Renton) on 6th April, which was reaffirmed in a Written Reply to me on 13th April, the Prime Minister said:
All members of the Government share a collective responsibility for Government policies.
In another reply to me on 6th April the Prime Minister, when talking about briefing journalists, said:
A Minister cannot express views on policy matters in a non-ministerial capacity."— [Official Report, 6th April 1976; Vol. 909, c. 99.]
I submit that such a proper doctrine must necessarily be extended to judgments by votes on policy matters as well.
Third, the matter is urgent. If the House does not take an immediate opportunity to discuss this apparent breach of Cabinet responsibility, a new precedent may be set which could be followed by other Ministers and which would thereby weaken the direct responsibility of all Ministers to defend the whole range of Government policy on public occasions. Such a precedent could also have the gravest effect on the ability of hon. Members to call Ministers to account in this House.
We saw, during the period of the EEC referendum, when Cabinet responsibility was temporarily abrogated, that Ministers could dissent publicly outside the House from Government policy but accept no responsibility for their opinions when questioned about them within the House. I believe that this is a serious matter. I have never previously used the


Standing Order No 9 procedure. I hope that my application will succeed.

Mr. Heffer: This is an abuse.

Mr. Speaker: The hon. Member asks leave to move the adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the apparent breach of the principle of collective Cabinet responsibility by the Secretary of State for Energy in failing to oppose a motion criticising the Government's policy on public expenditure at a meeting of the National Executive Committee of the Labour Party in London on 28th April".
Under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I have given careful consideration to the representations that the hon. Member has made, but I have to rule that his submisson does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Mr. Heffer: On a point of order, Mr. Spaeker. Is it not an abuse of the House that a matter of this kind should be raised when the question of collective responsibility is not in the constitution of this House, or in that of any Government, and never has been? There is nothing whatever in the constitution that says that there must or must not be collective responsibility. It is something which has grown up but—

Mr. Speaker: Order. It would be out of order for me to allow the hon. Gentleman to make a counter-case. I have already ruled that it does not fall within the terms of Standing Order No. 9 and I have disallowed the application.
There is another application under Standing Order No. 9.

COMMITTEE OF SELECTION

Mr. Lawson: I rise to ask leave to move the Adjournment of the House under Standing Order No. 9 for the

purpose of discussing a specific and important matter that requires urgent consideration, namely,
the failure of the Committee of Selection to reflect the changed composition of this House in its appointments of Members to Standing Committees.
I do not wish to detain the House. The fact that this is a specific, important and urgent matter has already been agreed by all sides in exchanges which have occurred earlier this afternoon. What we have been offered by the Leader of the House, however, is a one-and-a-half-hour debate late on Monday night. That is far too late. It is a constitutional affront and an insult to Parliament.
You, Mr. Speaker, are the last hope of those of us who believe in Parliament and in this House. You have it in your power under Standing Order No. 9 to say that a debate of such constitutional importance should be held either this afternoon or as the first order on Monday afternoon. This is what I appeal to you to do on behalf of those of us who believe in Parliament.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the failure of the Committee of Selection to reflect the changed composition of this House in its appointments of Members to Standing Committees.
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decisions. I have given careful consideration to the representations that the hon. Member has made, but I have to rule that the hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
It is a very dangerous thing to try to involve the Chair in party arguments on major issues of this sort when the House has been discussing its own decision this afternoon.

Orders of the Day — INDUSTRY AMENDMENT) BILL

Order for Second Reading read.

4.25 p.m.

The Secretary of State for Industry (Mr. Eric G. Varley): I beg to move, That the Bill be now read a Second time.
Reports have reached me that the Tory Opposition intend to vote against the Bill tonight. What they do is of no practical consequence but it is of considerable historical interest. By voting against the Bill, the Tory Party will be divesting itself of whatever fragments of industrial policy it still possesses.
The Bill is a straightforward amendment of one subsection of one section of a 19-Section Act which a Tory Government pushed through this House of Commons in 1972. I remember the cheers when the right hon. Member for Knutsford (Mr. Davies), as Secretary of State for Trade and Industry, announced the contents of that measure. I remember the bitter opposition it met in Committee and on Report. The cheers came from the then Labour Opposition, and I remember that we waved our Order Papers to signify our satisfaction. The opposition came from a group of Tory Back Benchers, who rightly saw that legislation as a milestone on the road back from Selsdon.
I remember that I spoke for the Opposition on Second Reading of that Bill. I welcomed it and made clear that we would support it. We did not vote against its Second Reading. It was a very flabby Bill. It provided many opportunities for considerable expense. Clause 7 of that Bill, for example, had no financial limits at all. The Conservatives published no guidelines on how proposals for assistance should be handled. We have had to make good that deficiency.
The Industrial Development Advisory Board was added only as an afterthought, in response to pressure from both sides, and the right hon. Gentleman in charge of the Bill turned down a Tory amendment which would have laid down viability tests for bestowing Government assistance. Having said all that, I would add that it was much to

be preferred to the vacuum that it was designed to fill.
In the last few months, Opposition spokesmen have alleged that this or that action by the present Government does not conform to this Government's strategy. But the Industry Act 1972, imprecise and open-ended in many ways, was the only industrial strategy that the Tories had. Now, as I understand it, by voting against this simple, if sizeable, increase of the Section 8 financial limits they are voting to rewrite their own past in a way which would have been envied by the editors of the Soviet encyclopaedia.
By repudiating the 1972 Industry Act —because that is what they will be doing if they vote against it—the Tories will be voting against any industrial policy whatever. No Tory Member is able to get up and give us a summary of the official Tory industrial policy. They can tell us easily enough what they are against—for example, the main economic highlights of their own period in office. They can tell us that they are against the nationalisation of Rolls-Royce; they can tell us that they are against the nationalisation of Govan Shipbuilders; they can tell us that they are against the Industry Act itself. Each of these actions now fills them with profound remorse. We understand that they are against all that.

Mr. Tom King: If the right hon. Gentleman will contain himself, I might have the opportunity to explain why we oppose the Bill. I humbly suggest that his job as Secretary of State is to present the Bill to the House and explain why the Government think that this expenditure is necessary.

Mr. Valley: I have been speaking for only five minutes. I shall come to it in a few minutes. I can understand why the hon. Gentleman wants me to run over the ground very quickly. I should have thought that when introducing an amendment to legislation it was right to give a bit of history and background, if not for the benefit of the hon. Gentleman, at least for the recollection of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), because he played an interesting part in the passing of the legislation. We know that the Opposition are against all that. But we


do not yet know—perhaps we shall hear later—what they are actually for.
Meanwhile, we have published our approach to industrial strategy, which has been welcomed by both the Confederation of British Industry and the Trades Union Congress—that is something that the Tories never achieved—and we are steadily getting on with implementing it. During the summer we shall be getting detailed and comprehensive reports from the economic development councils and other sectoral committees analysing the situation in a range of key manufacturing industries and making recommendations for actions by Government, industry and the trade unions.
What is more, we are even managing to make sense of the 1972 Industry Act. Under the right hon. Member for Worcester (Mr. Walker), it was simply a ramshackle machinery for handing out public money in a mainly purposeless way. [Interruption.] The hon. Member for Blaby (Mr. Lawson) has just walked into the Chamber. I know that he was here for a considerable time at Question Time, but he missed some of the historical background to the 1972 Industry Act. I am tempted to go over it again for his benefit. But I should warn him that he needs to be careful about it, because there are skeletons in the cupboard. The hon. Member for Bridgwater (Mr. King) has just asked me to run over it quickly. He asked me to explain the Bill. I thought that for his benefit and others it was necessary to go over the background a little. I shall be glad to do it again if the hon. Member for Blaby wishes me to do so. I recall the articles he wrote in 1972. He used to say that the regional employment premium was a marvellous instrument of regional policy, even though the then Conservative Government were to phase it out. I used to do my homework at that time, and I read a great deal of what he wrote.
I was about to say that we have refashioned the Act and established industry schemes under it. The Conservative Government were first with two industry schemes, the Wool Textile and the Offshore Interest Relief Grant Schemes. But we have expanded and built upon those schemes. Payments and commitments to date under them total £62 million. The closing date for applications under the Wool Textile Scheme has passed, but the

Offshore Supplies Scheme, with no terminal date, could continue to incur commitments totalling about £200 million up to 1980.
That is one of the reasons—

Mr. Nicholas Ridley: rose—

Mr. Varley: I shall give way to the hon. Gentleman when I have finished this part of my speech. That is one of the reasons why we need the Bill. I will give other reasons, but the fact is that the Offshore Supplies Scheme is one of the reasons why we need the Bill. We need the Bill and the increases under it to fulfil a commitment given by the Tory Government. Are we to be denied that opportunity? If by some chance the Opposition were to be successful in voting against the Bill, we could not carry out a Tory commitment. That is the ridiculous situation into which the Opposition have got themselves.

Mr. Ridley: Does the right hon. Gentleman now see his job as dishing out money? Does he see his achievements as being £60 million on this and £290 million on that? What has been achieved for the money? Surely the right hon. Gentleman should be talking about his successes, not failures, in terms of spending.

Mr. Varley: I must ask the hon. Gentleman to be patient, because I want to come to some of the other schemes. It is proper and reasonable that I should point out that we would not be able to fulfil the previous Government's commitments if we were denied the Bill. I hope that that is widely understood by all Members.

Mr. Michael Heseltine: The right hon. Gentleman should understand that the more realistic explanation is that he spent the money on Chrysler, despite his better judgment.

Mr. Varley: I am coming to Chrysler. I should not dream of avoiding mentioning Chrysler. Again, I must ask hon. Members to be patient. I shall get to Chrysler in due course. I hope that I may now make progress.
We have gone further than the two industry schemes set up by the Tories when they were in Government. In response to the pressures under which


important sectors have been suffering during the recession, the Government have considered closely with particular industries the basis for further schemes aimed at improving the competitive position of whole industries in the medium term.
Schemes for the ferrous foundry, clothing and machine tool industries were introduced last autumn. The initial response has been encouraging. Over 230 applications were received, involving a total potential investment of £140 million. [Interruption,] I understand entirely the position of the hon. Member for Cirencester and Tewkesbury. He has gone back to Selsdon so fast that it would appear that he never left. As far as I know, he is not an official Opposition spokesman on industrial policy. For some time the hon. Gentleman was in the Department of Trade and Industry as a Minister. We know that he wanted to butcher Upper Clyde and so on, and was defeated in that object. Eventually, the right hon. Member for Sidcup (Mr. Heath) regarded him as a great liability and put him on the Back Benches. I do not like rubbing salt in the wounds in this way, but occasionally it is necessary to remind hon. Gentlemen opposite of some of this history.
We have built on those schemes and, despite what hon. Gentlemen say and their scoff now, they are welcomed by serious members of industry. Those who represent areas of the country where the Wool Textile Scheme is in operation know the value of it. I am sure that the hon. Member for Colne Valley (Mr. Wainwright) is ready to acknowledge that straight away.
The yardstick against which proposals for these sectoral schemes and individual projects are evaluated is stated in the criteria for selective assistance placed before the House in January. We could not get any criteria for industry schemes from the Conservative Government. Our main consideration is to raise not only the level but the return on industrial investment. Only in this way can British industry compete more successfully in meeting the requirements of home and overseas markets.
In addition, as a specifically counter-cyclical measure, we have introduced the Accelerated Projects Scheme to encourage

companies to bring forward investment projects which have been deferred as a result of the recession. That scheme has been very successful. So far, assistance of £35 million has been approved for 32 projects, involving investment of over £200 million. The scheme has helped to create some 4.000 new jobs and to safe guard 3,000 others. It is expected to bring benefits to the balance of payments of £200 million a year in the 1980s.
On 6th April I also announced a special scheme of cost escalation insurance for the shipbuilding industry for both export and home orders.
These positive measures under Section 8 have been warmly welcomed and endorsed by the Industrial Development Advisory Board and have met with a favourable response from industry.
These powers must continue to be available for re-establishing the competitive position of our industry, and the new financial limits are essential to enable us to respond to the needs of industry.
Under Section 8(7) of the Industry Act 1972, the initial limit on assistance was put at £150 million with provision that this limit could be raised by Order on not more than four occasions by sums not exceeding £100 million on each occasion. The overall ceiling on assistance which might be approved by Order is £550 million. The House has approved two increases of £100 million in the initial limit, through Orders which came into force on 13th March 1975 and 5th February 1976, and the current limit stands at £350 million.
The Bill introduces a new initial limit of £600 million, which may be raised by Order on not more than four occasions by sums not exceeding £250 million on each occasion. The overall ceiling on assistance that might be approved by Orders would then be £1,600 million.
In practice, selective assistance under Section 8 is generally provided in the form of loans or grants phased over a period of years as the needs of the project or scheme require. Thus, a commitment to provide a grant or loan will normally precede by some years the completion of actual payments. To ensure that we do not anticipate the approval of the House, we count against the statutory limit commitments as they are incurred rather than sums actually paid.
We do this even though under Section 8(6) of the 1972 Act we are strictly required only to count against the limit sums paid under that section plus any guarantees given. Commitments entered into at present amount to £315 million. This compares with the current statutory limit on Section 8 assistance of £350 million.
For the future, we envisage continuing commitments being incurred through the various industry schemes, the Accelerated Projects Scheme and other measures of assistance to industry. During this financial year the total commitments counting against Section 8 limits could reach the overall ceiling of £550 million that may be approved by Orders. It is for this reason that the Bill proposes a new initial limit of £600 million. Even if no new measures of assistance under Section 8 were adopted, the total of commitments could reach £1,000 million by 1980–81.
The overall ceiling of £1,600 million proposed in the Bill will enable the ongoing programmes to continue and provide the latitude necessary for Section 8 to be used in support of our industrial objectives. Any increase in the limit from the initial figure of £600 million towards a possible maximum limit of £1,600 million would have to be approved by Order of the House. But the Bill provides for an increase from £100 million to £250 million in the instalments by which the statutory limit may be increased by Order. This change reflects our practice of counting commitments—I emphasise that word—in full as they arise and the impact of inflation.
I do not propose to increase the limit of £5 million for the approval of the House by affirmative resolution procedure for assistance to individual projects. In this respect, the control of the House will be even tighter in real terms than applied when the 1972 Act received Royal Assent.

Mr. Nigel Lawson: I have been listening with considerable care to the Minister's statistical explanation. How does he relate the figures he has given to the House with Table 5 of the Budget Red Book, which shows expected cash expenditure by the Government on company securities in 1976–77 at £125 million compared with the 1975–76 figure of £481 million? Will there be

this substantial reduction, or has the Red Book figure become outdated?

Mr. Varley: I do not think the hon. Member entirely understands the position. That is probably my thought. We counted as the actual commitment the contingent liability given. There are many examples, and that would account for it. If there is a further and easier way of explaining it, we will get the information and give it to the hon. Member during the course of the debate. Perhaps that is the reason for any apparent inconsistency between what I have said and the document he quoted.
The increase in the statutory limit does not imply immediate or early new expenditure. For example, an industry scheme will have a prescribed period within which proposals may be considered, and offers of assistance, and so commitments, will be undertaken within this period. But the resulting expenditure will be spread over the subsequent three years or more as payments are made against actual progress of the projects. Moreover, certain guarantees, such as those involved in the Chrysler assistance, are unlikely ever to be called, or liabilities may be less than the sums guaranteed.
I can give an example of what I mean. To date £26 million has been paid to Chryster, but at the turn of the year the figure of £162·5 million was the contingent liability. Many hon. Members thought that £162·5 million would immediately be handed over—

Mr. Heseltine: No.

Mr. Varley: I am not suggesting that a sophisticated man like the hon. Member for Henley (Mr. Heseltine) did not understand.

Mr. Heseltine: What about your hon. Friends?

Mr. Varley: My hon. Friends understood completely. In answering questions on the statement, I got the impression, however, that some Conservative Members did not understand it. I also read articles in the newspapers which demonstrated clearly that they did not understand the situation.
Assistance under Section 8 has been provided to sustain certain companies of key importance to their industries, to


strengthen particular sectors under industry schemes and to encourage counter-cyclical investment under the Accelerated Projects Scheme. With all its shortcomings, the 1972 Act has proved its value. That is why we are asking the House to extend its life and range.
The Tory Opposition ought not to shrink in shame from one of the few positive measures that will outlive their unproductive period of office. I confidently ask the House to give the Bill a Second Reading.

4.47 p.m.

Mr. Tom King: I was interested to hear the Secretary of State refer to the 1972 Act "with all its shortcomings". Some of its most serious shortcomings are the amendments by the Labour Government's Industry Act 1975 which removed from it certain essential protections. It takes a certain nerve to present a Bill to the House which represents expenditure of £1,600 million, to describe it as a straightforward amendment of a single section in an earlier Act and to expect the House to accept it.
The number of Labour Members present in this debate is an indication—despite the distinguished presence of the hon. Member for Bristol, North-East (Mr. Palmer) and two of his hon. Friends—of their total lack of interest in what is supposed to be a key industrial strategy. Maybe they are not so concerned, and have confidence in what the Secretary of State is doing, but I wonder whether I still have any confidence.
The Secretary of State said he used to do his homework when we were in office. Did he do it today before he came here? He quoted the offshore supplies programme and said that it now has a requirement of £200 million by 1980, and that if the"wicked Tories"voted against the Bill tonight he would not be able to go ahead with this important project.
That is not true. There are still tranches of £200 million in the existing powers, without this Bill. We should hear from the Minister tonight what is going on in offshore supplies. On 23rd January this year the Minister of State told us that this scheme—and it has been

running for three years—had in that period reached the sum of £910,000. We are now told that in the next three months there is a Government commitment for £200 million. That is a massive sum and we should like to hear more about it.
The Secretary of State seems to adopt two laws when he is speaking. The emptier the benches behind him, the more he attacks the Opposition and avoids discussing his own policies. When he is putting measures forward—thinking back to his speech on Monday on the Iron and Steel (Amendment) Bill—he adopts the philosophy of the larger the sum the more soporific the speech.
It has been quite a week for the Secretary of State. On Monday he asked for £2,000 million for the Iron and Steel (Amendment) Bill and on Thursday he is asking for £1,600 million. A visitor from a poorer country sitting in the Gallery this week could be forgiven for thinking that this must be a rich country. It is a little difficult to appreciate that the pound is at an all-time low and that we face the prospect of a £12 billion borrowing requirement when in the week following the worst troubles of the pound the Government are asking for £3,600 million new expenditure.
It is fashionable to say that the poor level of the pound sterling is caused by the differential in the rate of inflation and the lack of an adequate differential in the interest rate. But a large borrowing requirement undermines foreign confidence in the Government. On Monday, the editorial in The Times said:
We should be prepared to make major changes if we are to avoid the real loss of wealth which would follow further heavy falls in sterling … they involve a switch from living on credit and funny money, to living on what we earn, and paying our way in sound money. The financial expression may seem complicated: the underlying fact is known to everyone.
That is clear to hon. Members on both sides of the House. As my right hon. Friend the Member for Taunton (Mr. du Cann) said in a letter to The Times this week, Government expenditure is quite outside Parliament's control at the moment.
Nothing could more clearly underline that view than the way in which these measures are being put forward. There is no evidence that the Government are


attempting to live within their means or to recognise that the money is not there. It is a humiliating prospect that those who seek to carry the Bill will do so in the knowledge that the Government cannot honour it with funds themselves but will be dependent on their ability to borrow the money from others.
The Secretary of State gave no adequate explanation why the Bill has suddenly been brought forward. He said that there were two further tranches of money available. In February, barely two months ago, we approved a further £100 million. When there is still the possibility of two further tranches of Government money, the Bill is introduced to jump up the figure by a further £1,600 million. It is a disgrace that the Secretary of State should ask Parliament in this way for such a large sum of money. In the debate on the Iron and Steel (Amendment) Bill on Monday, one of my hon. Friends said that if the Secretary of State had been a member of a board which was seeking funds for an investment project and had put forward the sort of case he put forward on Monday he would have been laughed out of the board room and out of his job.
When we are being asked to approve such a massive sum it is a contempt of Parliament that we should be treated to the charade performance of a 10-minute knockabout in which the Secretary of State indulged in speculation about the Opposition's views and then gave only the baldest and most inadequate explanation of the Government's policy.
There is no doubt that there is a crucial need for investment. On the Department's figures, investment is running this year at £1,300 million less than it was in the last year of office of the previous Conservative Government. The Government are desperately trying to fill that gap in the only way they know how—by rushing around and spraying Government money in all directions. Various schemes are being put forward. The Secretary of State read a list of schemes, which included ferrous foundries, machine tools, printing machinery, textile machinery, paper and board, clothing and non-ferrous foundries. The Chancellor of the Exchequer in his Budget speech referred

to one of those schemes, on which the Economist commented as follows:
Mr. Healey insisted on having a new candidate to name in his Budget speech alongside the £40 million allocation. The best the Industry Department could come up with was the electronic and automation industry. The civil servants were deliberately non-specific because they are not yet sure whether it warrants a scheme.
Another scheme for consideration is aid for that commanding height of the economy—poultry processing. I do not know what implication that has for the European approach to evisceration, but my hon. Friend the Member for Banbury (Mr. Martin) may be interested in it. We have a plethora of schemes and, in spite of what the Government say, industry is not rushing to take them up. Why is that? The answer is contained in the representations on price control made by the CBI to the Government. The CBI said bluntly:
There is no chance of the private sector embarking on the major investment programme and re-employment that the country needs unless an early restoration of adequate levels of profitability can be foreseen.
It would be courteous to welcome the Minister of State to his new job, but I greet him with some misapprehension because I know the Department from which he came. The policy of the Department of Prices and Consumer Protection is in direct conflict with what the Department of Industry is seeking to do. Is the Minister of State a gamekeeper turned poacher, or the other way round? I should, however, like to give him a general welcome to his new responsibilities. I must not make the welcome too long, as I have to say with respect that we do have to welcome new Ministers in the Department of Industry quite often.
The Government claim to recognise the problem. Are they at long last taking to heart their "An Approach to Industrial Strategy", which said that we must ensure
that industry, both public and private, is able to earn sufficient profits on its investment to spur managements to expand and innovate and provide them with the internal finance on which to base investment.
There is no way in which we can get the investment needed in this country by artificial means unless there are the funds within industry to make it possible.
The damage being done by the Price Code was recognised in a Guardian editorial this week which said:
It is essential … that the Code must be replaced by provisions which will not deter new investment as seriously as the present provisions … what do effective price controls imply? They undoubtedly mean less investment.
If more investment is now the top priority, we must ensure that industry is able to retain the funds.
If the Secretary of State has not read the CBI's examples of the Price Code's impact, I can give him the whole dossier. One example involves a large engineering company which studied an investment proposal which would have increased efficiency and produced more jobs. However, the extra labour costs could not be passed on in full because of the Price Code's productivity deduction. However, the reduction in costs per unit which the investment would have achieved would have had to be passed on to the customer under the Code, offset only temporarily by investment relief.
As a result, a project which was supposed to show a return of £1 million would, because of price controls, have shown a loss of £300,000. The project was abandoned. The CBI has provided a whole series of examples.
There is another example in a successful engineering company which I visited recently. It had been seriously hit by restraint on profit levels. Does the Secretary of State know that their level is fixed at 10 per cent. and that this company has been unable to generate funds for new investment? Does he know that his Department approached the firm saying it would like the company to consider bringing forward accelerated investment schemes? The firm put forward four schemes to his Department, two showing a return of 10 per cent. and two a return of 15 per cent. The Department said that it would certainly not support the schemes showing a return of only 10 per cent. because they were unviable. It would put money only into the 15 per cent. scheme. But the Minister of State's old Department says the company must not show a return of more than 10 per cent. on its prices. If the company goes ahead with its 15 per cent., in turn it will be told to reduce its prices.
On one hand, the Government are trying to get investment and using all

sorts of pump priming while, on the other, they are doing all they can to stop the water rising in the well so that the pump does not work.
If price controls can be justified, it is only in a very limited rôle. I regard them as being like a tourniquet. When a person is bleeding, a tourniquet may be essential, but if it is left on for ever the patient will get gangrene.
If the Secretary of State wants investment, he will not get it by tinkering around the edges of the problem and stuffing in lots of Government money which has to be borrowed from somebody else, thereby reducing the value of the pound still further. We should be creating the climate in which new investment can take place.
On Monday, the Secretary of State was asking for £2,000 million for the British steel industry. I recognise the industry's difficulties, but one of the reasons the Secretary of State had to ask for so much money was that the self-generated financing ratio of the British Steel Corporation had dropped from 55 per cent. to 30 per cent. and the only source of funds was borrowing from the Government.

Mr. Arthur Palmer: The hon. Member is getting very worked up about this. Has he forgotten that it was his Government which imposed unasked-for price controls on the electricity supply industry which is still trying to recover from that blunder?

Mr. King: I respect the hon. Member for Bristol North-East and I think he takes my point. The case for price controls may be that they have a short-term validity. The danger lies in prolonging them. Perhaps the hon. Member has made my case. He is clearly opposed to price controls in nationalised industries. The Government say they recognise the need for investment in public and private industry. What is fair for one sector must be fair for the other. It is worrying that the Government are perpetuating the belief that industry can have security and prosperity through these investment funds when, in fact, there is no solution other than for companies to become profitable.
There was a very sober warning given by Sir Richard Dobson yesterday when he said that even in British Leyland—with the massive funds proposed—he


could well see the time when neither he nor his board would be able to recommend the Government to put more funds into the organisation. The seriousness of the situation at Leyland is indicated by the fact that lost production has totalled £50 million since last month.

Mr. Varley: The hon. Gentleman is incredible. The best thing for him to do would be to get through his speech very quickly. We know the Tories did massive U-turns while in Government, but they seem to be doing even bigger U-turns in Opposition. Before he gets himself worked up with this synthetic anger, he should turn round and look at hon. Members like the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) who know the Opposition are not realistic about industrial policy.

Mr. King: I do not think that intervention was particularly helpful. Those of us who care about what happens to industry in this country know the difference between the use we made of the Industry Act 1972, with its precautions, and what the present Government have done with it. By the time we left office, we had spent just £10 million on selective schemes. The Secretary of State has the nerve to imply that we are in favour of endless payments to an endless number of projects. It is utterly disgraceful. It is not fair to suggest that we are adopting double standards.
There were two interesting comments in the Press which I hope the Secretary of State read this morning. First, Lord Ryder said younger management should be given a chance and promoted within industry. Secondly, in the same papers which reported those remarks, there was a reference to the fact that managers had suffered a 13 per cent. drop in their real incomes this year.
If we are looking for the people who have given a year for Britain, we shall find them in middle management. The former Secretary of State for Trade paid tribute to our export performance and to all those who helped to improve it in such a remarkable way between 1974 and 1975. He said it was wholly due to the efforts of British workers and managers in the export markets. No matter how much pump priming the Secretary of State does and how much Government money is spread around, we shall not

solve our problems unless we have dedicated and enthusiastic people in our industry who will stay there and help us fight our industrial battle.
It is difficult to get the facts, but I am worried about the number of people who are going to work abroad. In addition, the return flow to this country is effectively blocked. It is almost impossible to bring back the best of our managers from overseas, and this is a problem on which the Secretary of State should be giving serious consideration.

Mr. Bruce Grocott: Will the hon. Gentleman make it plain that his party completely condemns those who were on pretty good incomes who abandoned Britain when, according to his estimate, the country particularly needed them?

Mr. Lawson: Hon. Gentlemen opposite hounded them out.

Mr. King: The hon. Gentleman has only recently entered the Chamber.

Mr. Grocott: I wish I had not bothered.

Mr. King: The hon. Gentleman did not bother to be present to listen to his right hon. Friend the Secretary of State. I take some slight comfort from the fact that he has done me the courtesy of listening to me. However, I am not in favour of turning the country into a concentration camp. I think I carry most of my right hon. and hon. Friends with me on that point.
When the Chairman of the Illinois Central Gulf Railway came over to this country he spoke to Sir Richard Marsh about running a railway. He later said:
The trouble with Dick is that the has responsibility without power, and that ain't no good for anything except a prayer meeting.
The trouble is that too many people in industry have responsibility without reward. That is no good for anything except a charitable organisation and if we try to run British industry as a charitable organisation we deserve the fate we shall have. We shall see a standard of living that none of us wants.
The Bill proposes a massive increase for which no case has been made. Our intention to oppose the Bill is certainly not a rejection of the principle of selective assistance. The Secretary of State knows that that was the proposal that


we embodied in the 1972 Act. We provided safeguards which the Labour Government have abolished. Because those safeguards have been removed, because no case has been made at all for the massive extra sums involved and because the Government are grossly overspent and simply do not have this money, we shall vote against this further extension of profligate public expenditure tonight.

5.12 p.m.

Mr. Dennis Skinner: I welcome the opportunity to take part in this debate. Prior to entering the Chamber I was engaged in some serious discussions on matters concerning irregularities that are alleged to have taken place within the Bank of England. I have been dealing with that matter.
During the last quarter of an hour I have had to endure listening to what the hon. Member for Bridgwater (Mr. King) had to say. I am astonished by the almost synthetic abuse to which we have been subjected. That has happened mainly because the hon. Gentleman was trying to say that he would like to return the position where market forces prevailed completely, absolutely and truly, as they were supposed to do after the famous Selsdon meeting, but at the same time indicating that during the period that the Conservative Government were in office they introduced the Industry Act in such a fine and technical way that it was able to be used without increasing the money supply or distorting the market forces.
The hon. Gentleman cannot have it both ways. The plain fact is that capitalism is on the decline. That is one of the reasons why the Bill is before us today. I have seen many of these Bills since becoming a Member. Each one of them has been some sort of prop to the capitalist system. Incidentally, each one has had to have within it a great deal more money. It has not really mattered whether such a Bill has come from a Labour Government or a Conservative Government. Throughout a period long before I came to this place —this probably took place over the past three decades—the way in which market forces have been able to generate new investment has declined year after year.
Irrespective of what the Tories have said in opposition, when presented with

the power of government they have had to face the responsibility of taking one of two options. One of the options has not really been open to the Tories. It cannot be, as it takes them a great leap forward to State control. Therefore, they take the easier option—the one that permits them to say that they are trying to preserve the free market forces, but that in order to help here and there, to prop up a small part of industry in one area, to assist regions in a certain direction, to help a small firm in another area and to mop up unemployment as they did in 1972 and thereafter, it is necessary for them to intervene in a multitude of ways, which, as they claim, do not add up to interference.
That is what the Tories want to do when they are in power. The fact is that it leads them to the Industry Act. Of course, they try to adopt the same approach in a piecemeal fashion.

Mr. Lawson: The hon. Gentleman is trying to maintain that the private capital market cannot finance the investment that is required. Does he not realise that finance is not forthcoming from the private market when the venture is not profitable because of Government interference, or whatever else may be the reason? When something is profitable, such as North Sea oil, private capital is available. Private capital flowed into North Sea oil on the largest possible scale—a far larger scale than that of many Government projects.

Mr. Skinner: When the Tories were last in power I think that the hon. Gentleman was involved in editing an important Tory periodical. Why did he not make it clear, after the Tories had been elected in 1970, that they had struck out on the wrong course?

Mr. Lawson: I did.

Mr. Skinner: It may be argued that for a few months the Tories indicated that they were reverting to the jungle of market forces. However, after a further few months, after the Civil Service had got round their necks, they indicated that they could not revert to that jungle. They were told that they would have another 100,000 on the dole in next to no time if they did.
When that position was reached, Tory Ministers propped themselves up at the Dispatch Box to trot out the intervention policy. They did so not to my amazement, because the Tories had the same briefs as some of my hon. Friends got in 1974. Tory Ministers appeared at the Dispatch Box and, instead of trotting out the Selsdon philosophy, hey presto, they trotted out the intervention policy. The serried ranks of the Tories on the Government Benches dropped their heads. Almost all of them looked sad. Those on the Front Bench looked cheerful, or tried to look cheerful. They were intervening to a greater degree than The Tories had ever intervened before.
That reversal having taken place, we moved forwards another stage. The right hon. Member for Leeds North-East (Sir K. Joseph), who represents the Tory Party across a wide area—the precise range of which I know not—indicated at the Tory Party Conference that the ratchet had moved another little notch. That is what happened. The 1972 Industry Act came later because of the 1 million unemployed in February. That is when the ex-Prime Minister, the right hon. Member for Sid-cup (Mr. Heath), said at the Dispatch Box—and he could not hear himself speak because of the 1 million unemployed—that he had decided, along with his Cabinet, to change course.
That was not a big job for the right hon. Gentleman. It was not difficult for him to change course. He merely told his Cabinet what he was going to do. About 20 people immediately turned right round. No one protested, not even the present Leader of the Tory Party. I am told that she grumbled in private about the change in direction. She grumbled about the Industry Act but she did not do anything about it publicly. She carried on, and the Tory Party intervened in a fairly dramatic fashion. At about that time they rescued Rolls-Royce. That gave them a clue as to how they could prevent another Rolls-Royce debacle in future.
I came here today, Mr. Speaker, shortly before you took the Chair, to listen to the Tory Front Bench spokesman—the hon. Member for Bridgwater. He told me what the Tories would do if they came back to power. It is not that I do not want to believe the hon. Gentleman;

based on past experience, I cannot believe him. When the Tories were in power, I watched the hon. Gentleman, when he was an ordinary Back Bench Member sticking up his hand in the right places and voting in the right Lobby, consistently, day after day and week after week. Rather strangely, most Tory Members followed. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) has a rather difficult rôle to play in this matter. I am not sure whether he was kicked out or got dropped on the way. He made a few noises. By and large, however, the Tories accepted it.
I have news for the Tory faithful who have been prepared to listen to their Front Bench spokesman—the nine Back Bench Members. It will be the same thing the next time round, if they get the chance. If they get the chance, the intervention policy will continue, because it must.

Mr. Tom King: The hon. Gentleman has referred to the Opposition Back Bench Members who listened to my speech. Why does he think that none of the Back Bench Members on the Government side of the House listened to the Secretary of State?

Mr. Skinner: As I explained, I was on my way to listen to my right hon. Friend, who is my next-door neighbour, when I got involved in trying to explain to a mass of Lobby correspondents outside this place about the irregularity that has been occurring in the Bank of England. I had to explain that. When I leave the Chamber this evening, I shall be explaining a little further about that sordid affair, which needs a wider reference to the public generally.

Mr. Ridley: Perhaps a Labour Party general inquiry.

Mr. Skinner: The Tory faithful will have to put up with the Industry Act and these increases. As I say, if the Tories returned to power I would have no doubt that they would propose even more increases. The plain fact is that a £10 million-a-day intervention is the total of grants of one kind or another—tax reliefs, and so on. The Tory Party, if in government, could not dismantle it. It is too large.

Mr. Lawson: When will the hon. Gentleman say whether or not he supports this policy?

Mr. Skinner: I am coming to that. I shall deal with it much later. I am trying to explain to the hon. Gentleman what he will do. I know what he will do tonight. If he gets the chance, he will stand up and vehemently tell us what ought to happen, and he will vote in the same fashion as all his colleagues. They will be one happy band of brothers. But he would not do that in government if he got the Front Bench job that he is currently shadowing. [Interruption.] Is the hon. Gentleman suggesting that he did not speak from the Dispatch Box the other night on some rather important financial matters at about 1 a.m.? That is what he will do if he gets the chance to put forward policies on behalf of his party.
The Tories will do it not only because of the massive amount of money that is being channelled and funnelled into the private sector, which is diminishing all the time because of the falling rate of profits and the difficulties—

Mr. John Stokes: With a Socialist Government.

Mr. Skinner: It has nothing to do with a Socialist Government. The fall in the rates of profit has been going on for a considerable time. I remember putting down Questions, when the Tories were in power, about the rate of profit generally throughout the private sector. I got answers that indicated that it was falling during most of that time. There were slight spasms here and there, but by and large the general trend over about 15 or 16 years has been a falling rate, give or take a few minor variations along the way. That is because of technological changes that have taken place in industry. It is because of the mad desire of most politicians to allow the implementation of services not in the public sector but in the private sector—services that some of us would argue were of too low a priority and which perhaps we could do without.
The manufacturing base has been narrowed more and more as each year has passed. It is because of having to compete with outside interests that have, perhaps, had greater advantages than in-

terests in Britain. Taking Japan or the Common Market countries, one can argue that, for a good number of reasons, their ability to produce more efficiently has without doubt made it more difficult for British speculators and firms to compete on the same basis. Our entry into the Common Market did not help us in that regard, either, because it enabled people to transfer their money and investment to other parts of the world, whereas hitherto they had found it more difficult to do so.
For all those reasons the private sector, especially the manufacturing area, has been diminishing over a long period. It is that diminution that we must arrest. Therefore, my right hon. Friend comes forward with a proposition which is, roughly, that we believe that we can prop up the private sector and keep to some extent a modicum of price control—I do not go any further than that—by giving grants of various kinds, especially in areas in which they are needed for reasons of unemployment, for technological reasons or any of the other reasons for which my right hon. Friend is allowed to do these things.
I take a different view. This is where I answer the question raised by the hon. Member for Blaby (Mr. Lawson) about my personal views. He rightly raised the point. As a member of the Parliamentary Labour Party, I take the view, roughly, that because the capitalist system is now showing signs of decline that are more serious than any of those previously shown since the end of the war, and because the contradictions are exposing this to a greater degree, we ought to move in, in a public fashion and in a more dramatic way. We should recognise the difficulties of the private sector in surviving to an even greater degree than is being done by my right hon. Friend and his colleagues—who form a majority of the Parliamentary Labour Party. Let me put that on record. Not every one in the Tribune Group would agree with the point that I am making. I understand that my right hon. Friend represents the majority view, but it happens not to be mine, as an individual point of view.
I would take another great leap forward, and not rely on getting another few notches on the system over a long period, during which we might have another fundamental crisis of high


interest rates, high unemployment and all the things attached to economic crises such as those of the past 30 years, each one of which has shown itself to be greater than its predecessor. That would be my way of examining this problem and dealing with it.
I understand my right hon. Friend's point of view when he refers to the current view within the Parliamentary Labour Party as represented by the Cabinet and the Government. Therefore, I shall naturally support my right hon. Friend's application and the Bill to increase the amount of money that he will be able to use, on the basis that I know that for the majority of Labour Members and the majority of people in the Labour movement it will represent the answer to the problem.
I know that we shall return to the problem, and that on the next occasion when we run into an economic crisis—and it may not be as far away as the time lag between the present crisis and the previous one—we shall return once again to the same fundamental problem. Perhaps I shall wander into the Chamber and make a similar speech. We shall have to face the problem.
I understand my right hon. Friend's reasons for introducing the Bill. With his colleagues, he takes the view that by this amelioration they will be able to keep down the unemployment levels in some areas, soften the misery of unemployment, and many of the things they want to do to placate certain problems. I take the view that this is not resolving the problem with which the country is faced, and that it is not doing it in a Socialist fashion; but that is neither here nor there. I am pleased to be able to take part in the debate.
I return to the central point that I made at the beginning of my speech. The Tories are in extreme difficulty in this matter. They introduced the Act in 1972 because there was high unemployment, and they decided to use the tools of that Act in a more limited way than this Bill does, but they used them for pretty much the same reasons. The difference between the Tories in 1972 and the Government today is that my right hon. Friend is taking account of inflation and understands that the crisis is more severe than in 1972. My right hon.

Friend therefore needs more flexibility and more money. For that reason I shall support him tonight, in the knowledge that we shall return to the problem over and over again, until it is solved in the way that I have described.

5.31 p.m.

Mr. Nicholas Ridley: The House is fortunate because the hon. Member for Bolsover (Mr. Skinner) managed to escape the financial journalists. If he had not he might have been prevented from delivering his speech. It was in the best traditions of parliamentary rhetoric. The only trouble with it was that it was not serious. It was a frivolous speech. His mind must have been more on the problems of the currency markets on which he had been engaging financial journalists. Perhaps one of the reasons for the appalling fall in the value of the pound is that financial journalists have been listening too much to the hon. Member for Bolsover.
The speech of the Secretary of State was also frivolous. Listening to it one would not have believed that there is an appalling industrial and economic crisis. The two speeches from the Government Benches have been entirely devoted to an attempt to tie up my right hon. and hon. Friends in their policy. That may be great fun, and there may even be some justification for it, but it is not serious and it is not a real contribution to the debate.
I want to make a serious analysis of what is wrong, and I know that the hon. Member for Bolsover will not agree with me. I intend to use the debate to analyse what has gone wrong with our industrial effort. It is too simple to try to describe the situation in terms of what the Tories did or what the Labour Government did, and how much investment took place under each Government. One cannot take periods of Tory or Labour Governments and say that things were good at one time but bad at another. There has been a continuing decline.
We have substituted new objectives for industry. Whatever one might feel about the old objectives, the idea was that industry should achieve the best possible return on capital and that it should satisfy the needs of customers. Those two objectives have been thrown out of the window in recent years, to such an extent that I


want to treat the House to one quotation from the booklet entitled "The Contents of a Planning Agreement" from the Department of Industry. In that pamphlet there is only one mention of the consumer and that is on page 16, paragraph 26, which says:
What evidence is there that the company's procedure for handling customers' complaints is satisfactory? Has the NCC been asked about it?
That is the only reference to the market in the whole of the document.
That brings me to the new objectives of industry as evidenced by this Government more strongly than any before it. I see that the financial expert, the hon. Member for Bolsover, has already left the Chamber to discuss currency markets again. What a pity.
The first new objective of industry is that the price charged should be acceptable to the Government. We now have this mad policy of industrial price control, and I must chide the Secretary of State for defending price control today because he voted against it when the Conservative Government introduced it in 1973. I must also chide my hon. Friend the Member for Bridgwater (Mr. King) for trying to dissociate himself from price control, because he voted for it in 1973. I have consistently voted against price control in the 16 years I have been a Member of the House.

Mr. Tom King: I respect my hon. Friend's consistency in this matter but I tried to distinguish between what is a short-term emergency and measures which are prolonged long after their useful life. I used the analogy of the tourniquet as an example.

Mr. Ridley: I do not want to become involved in the price control argument except to say that the damage price controls are doing to industry is deep and lasting. Anyone who wants British industry to succeed, expand and prosper must want price controls removed. They cannot have it both ways. The time has come to make up our minds.
The second problem, that of jobs and the way in which people lose them, is more difficult: price control can be eliminated easily. Welcome though the unfair dismissal legislation is on humane grounds, it is another burden on Indus-

try.It has an immobilising effect on managers who are attempting to introduce labour mobility. The provisions of the Act are counter-productive to efficient, modern industry. If one puts jobs first, industrial efficiency and productivity must come second. That might be right, but the consequences are there for all to see—growing overmanning, growing misuse of labour, the desire of Government to introduce job creation and preservation schemes which can only lead to having more people in jobs than industry can carry.
All Government legislation has been along those lines. One cannot have planning agreements, national enterprise boards and all the claptrap of State control in industry, unless one explains what is its purpose. Its purpose is not to promote industrial efficiency but to keep people in sheltered, protected employment. For real industrial efficiency the National Enterprise Board would have to close down all inefficient industries and rout out overmanning. The board would have to insist on unemployment being created on Merseyside because that is where the overmanning is. The Government and their supporters try to pretend that the whole claptrap is designed to secure greater industrial efficiency. It is not. It is designed to ensure that the industrial priority is to employ people in the greatest numbers possible in the places where the Government want them employed. I understand that but it is counter-productive to industrial efficiency.

Mr. Stokes: Does my hon. Friend not agree that it is no good having production unless industry makes the goods that people want to buy? It is the market and the customer who should decide.

Mr. Ridley: My
hon. Friend is correct. That is what has gone wrong.
The worst thing of all is the industrial rescue. When the Government save a major industrial company they signal to all industrial workers that no amount of overmanning, strikes or inefficiencies will carry any penalty, and that, no matter how hard they push wage claims or refuse to accept modern working practices or shift work, there is no ultimate danger to the enterprise, because it will be saved. That is a final reinforcement of the policy of putting people's convenience and their jobs before industrial efficiency.
That is what is wrong with British industry. It has resulted in three or four times the manning scales that we should have, a quarter of the amount of shift work which our competitors are doing, and appallingly low use of capital investment resources. It is no surprise that this is the consequence.
I want to take the matter a stage further. The latest pressures from the Labour Party are for import controls, workers on the board, the virtual abolition of the prerogatives of management, and the transfer to trade unions of large areas of industrial decision taking. Those ideas are not in order to obtain more shift work and to have machines manned properly. They are not in order to use our capital stock effectively. They are in order to make life even easier and less uncomfortable, to take all the hardship that is left in British industrial life out of it.
The House can have it as it wishes. I am not necessarily arguing that it is wrong to do those things. I am saying merely that we must understand the reason why our industrial performance is so bad. Germany, Japan and France are pursuing the objective of return on capital employed by satisfying the demands of the market place: nothing else. They do not think about the effect on workers, trade unions or any of the sacred cows of the Labour Party.

Mr. Grocott: That is good?

Mr. Ridley: It may be good or bad. I am trying to explain to Labour Members why a further dose of the medicine that is already poisoning British industry is unlikely to help the patient to recover.

Mr. Brian Sedgemore: They have planning agreements in France.

Mr. Ridley: In a sedentary intervention, the hon. Gentleman raises the question of planning agreements in France. He will be wise to study the tax structure there. He may have heard that the French economy is beginning to decline, and he may also have noticed that the franc has been weak. That may be coupled with the fact that the French are now introducing the same sort of Socialist taxation policies as we have.
The escalating sums of money that we are being asked to vote for industry, to which the Bill is a witness, are the price we must pay for the decline in the standards of efficiency of British industry. We cannot feel happy about substituting the judgment of the State for the judgment of the market. The whole House is agreed on the problem—that the share of private industrial investment has been woefully low and is becoming worse, and that there is a vacuum. Even if we make money available through the City or the Government nobody wants to invest it. I do not think that that is a contentious point.
The Labour Party then says "Let the State decide how to invest it." We say "Let us find a way of encouraging the private sector to invest it." I should like to remind the House of examples of major State industrial investment. I should hardly be wise to mention groundnuts, but that is where all this started. I should like to mention the atomic energy programme. The State has invested £l½billion and has nothing. We have not sold one atomic power station round the world. We have the hovercraft, another colossal British industrial failure, and the hovertrain. We have the 500 megawatt sets, which set back electricity generation for years. Now we have that all-time sales winner, the Concorde.

Mr. Skinner: Is not the hon. Gentleman forgetting something which is a bit nearer home and much more recent? In the context of all the other matters he has mentioned he should refer to the Crown Agents' bid to involve themselves in the property market, which has already resulted in the taxpayer having to find £85 million. That was passed by the House, and I cannot remember the hon. Gentleman protesting in the same way as he is protesting tonight. The sad fact is that it will cost a hell of a lot more before the mess is cleared up.

Mr. Ridley: I am always grateful to the hon. Gentleman for his interventions. He makes my point, that where the State has undertaken major investment it has got it wrong, even more often than the private sector. As far as I know, the Crown Agents do not issue shares or have owners. I believe that they draw their resources from the House.
I have given examples of identified investment projects. The list of companies taken over by the State in order to inject money into them to make them succeed is equally dismal: Beagle, the Scottish Daily News, Meriden, the Kirkby co-operative, and now the two great motor companies, Chrysler and British Leyland, where all that I have described is only too evidently true. It is too soon to judge for sure, but the evidence that we have about the use of money under the Bill on projects to encourage investment, or for buying into private sector companies in the hope that they will take off, must be very depressing for Labour Members. It must sometimes cause them sleepless nights, after they have called for more State investment, to think of the results of such State investment as has already taken place.
There is no doubt that our most successful competitors are succeeding through private sector investment. Although there are examples of semi-partnerships, they are partnerships with the financial parts of Government or the banking system, rather than through the trade unions and Socialist politicians, who, in this instance, are pursuing objectives totally different from those of the State planning which is taking place in France or Japan. I do not think that one will find the trade unions in Japan saying "Put another £1,000 million into this industry because of the jobs it will save. "Hard-headed bankers there say "You could use your cash better if you took it out of that industry and exploited this market." That is why we find ourselves bedevilled with colour television tubes, motor cycles and motor cars from Japan. It is because of an absolutely dedicated, hard-headed sense of where the best market is and how the best use can be made of investment. Not till the Labour Party gets that attitude into its view of how State funds should be used will it have a success story.
I shall now be constructive. There has been a great deal of teasing and bantering about what the Tories would do. I plead not guilty to any equivocation over prices and incomes, State help for industry, or any of these matters. I shall tell the House what I continue to believe the right solution to our industrial problems to be. I draw attention to Shannon, in Eire, where there is a

province—if that is the right term—which is free from tax liability till 1991. Any company which starts operations there does not have to pay tax till that date. If we could give a guarantee of that kind we would begin to encourage investors.
I am sorry that the hon. Member for Liverpool, Walton (Mr. Heffer) is not here because I believe that if he were prepared to go to Merseyside, one of the more depressed industrial areas, and tell industrialists that their investment will be respected by Government and by the taxman for 20 years ahead, that the shareholders will have a good and fair return on their money, and that managers will not be taxed out of existence by having to pay more tax than their counterparts pay in other countries, that surely would make an enormous difference, because that area would obtain the required investment. The hon. Gentleman could go even further and say to the trade unions on Merseyside "Throw out restrictive practices, cut out overmanning and throw aside the process of having six men to do a two-man job". If that line were followed there would be so many industrialists rushing up to Merseyside that the trains, already oversubscribed, could not even carry them.
The Labour Party must realise that the crisis is one of Socialism. What is afflicting this country is the failure of Socialism. In no sense is this a crisis of capitalism. Capitalism has been starved of resources and there has been no encouragement to allow the system to thrive. All that happens is that it is blamed for any failures.
We have only to look at this Bill to see the danger of its provisions. We are being asked to spend another £1,600 million on propping up failed Socialism. The levying of a sum of £1,600 million will do grave damage to what remains of our productive industrial base. The Government cannot obtain the money in taxes, so they will print it. In due course that money will find its way through the system and will cause inflation and disrupt the stable areas of British industry. It will certainly cause more damage to be done, as if enough damage had not been done already.
Why cannot the Socialists realise that all they have cherished for so long, all the rubbish they learned when young, has


proved and is proving so dangerous to this country that it is destroying us? When will they learn that their policies are eroding our industrial base and are thoroughly destructive to all we rely upon to survive?

5.54 p.m.

Mr. Geoffrey Robinson: I am grateful for the opportunity to take part in this debate, and I apologise for the fact that I was unable to be present for the Front Bench contributions.
I was interested to hear the speech made by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). All I shall say of that speech is that it was a rhetorical effort in the parliamentary tradition, and far less sensible than the speech of the previous contributor. The speech made by my hon. Friend the Member for Bolsover (Mr. Skinner) was rhetorical, but he put forward a coherent policy that was consistent with Socialism. It certainly contained a lot more than did the speech of the hon. Member for Cirencester and Tewkesbury. But neither hon. Member tackled the central issue that faces this country. The central issue lies in finding a way to deal with our deep-rooted industrial problems—in other words a solution to our problems that will be acceptable in terms of social democracy and the traditions within which we live.
Let me pass from the macro to the micro level and take the opportunity to say something about certain of the many purpose for which the money that we are voting in this Bill will be used. It is particularly appropriate to do this, since I come from a constituency and an area that will benefit considerably from the provisions of the Bill. I refer to Coventry in particular and the West Midlands in General.
We have seen that operations mounted by Labour Governments against a background of bitter and acrimonious debate in this House—measures pushed through against the relentless opposition of the Conservative Party—have in effect saved Coventry from a devastation that would have made the blitzes of 1941 and 1943 pale into insignificance.
Have Conservative Members fully appreciated what would happen if funds had not been made available to Chrysler,

British Leyland and Alfred Herbert? Indeed, would Conservatives have denied those funds if they knew that it would affect the livelihoods of 50,000 people in Coventry and in the areas surrounding the city? I invite the hon. Member for Cirencester and Tewkesbury to say whether he would vote against such provisions.

Mr. Ridley: Yes.

Mr. Robinson: At least we now have it clear that the hon. Gentleman shows indifference to the livelihood of 50,000 people in and around Coventry. Does he believe that such a policy is practical in the Britain of the 1970s?

Mr. Ridley: Yes.

Mr. Robinson: Then you are farther from reality than I thought.

Mr. Speaker: Order. I appreciate that the hon. Gentleman is a new Member, but he must remember that when he says "you" he means me.

Mr. Robinson: I shall do my best to comply more completely with the conventions of the House. Perhaps I should have said that the hon. Member for Cirencester and Tewkesbury is farther away from reality than I thought. The hon. Gentleman's attitudes are just too theoretical. It is no good his coming forward with magnificent pieces of rhetorical but totally unrealistic political and economic atavism. What he propounds is nothing more nor less than that.

Mr. Norman Tebbit: Will the hon. Gentleman say how many people will be unemployed in Coventry when our creditors refuse to lend us this £1,600 million, which will be additional to all the other many millions that we are now trying to borrow?

Mr. Robinson: The public sector borrowing requirement is a matter of great concern. I do not disagree with the hon. Gentleman on that score. I think that we can raise credit for a limited period in future. I do not think that we shall be denied that money by our creditors, and it will be well spent in the areas to which it will go. If it is not well spent, it will be as much the fault of the managers as of the men.

Mr. Ridley: The hon. Gentleman says that we can raise the money for a limited amount of time. What happens when we reach the limit?

Mr. Robinson: I do not want to be side-tracked along those lines.

Mr. Nicholas Winterton: You are the one who is divorced from reality.

Mr. Speaker: The hon. Member I or Macclesfield (Mr. Winterton) has been in the House longer than has the hon. Member for Coventry, North-West (Mr. Robinson), and should know the rules.

Mr. Nicholas Winterton: I apologise, Mr. Speaker. I withdraw the word "you".

Mr. Robinson: Bad habits seem to be contagious.
I wish to deal first with the Chrysler situation. The Labour Government should in no way apologise for their rescue operation of Chrysler. The decision was correct. The Government, particularly my right hon. Friend the Secretary of State for Industry, devised a finacially and organisationally ingenious formula. The operation was perhaps as skilful as some of those mounted the then Industrial Reorganisation Corporation, which was abolished as an act of rash and reckless political prejudice by the Tory Government in 1970.
It is true to say that the right hon. Member for Knutsford (Mr. Davies), as the then Secretary of State for Industry, tried to avoid that decision, but he was overruled by the reckless political prejudice that prevailed in the Cabinet at that time. It is the same Cabinet that embarked on policies of confrontation and conflict, the consequences of which are still working themselves through our industries and in particular those in the Midlands.
If hon. Members opposite will not accept that, they are refusing to come to terms with our central problem in regard to industrial relations, particularly in those areas in the Midlands that I know something about. Unless they are unable to realise that they will never succeed.
With regard to Chrysler, there is one matter in particular to which we shall have to pay attention. The management of Chrysler in the United States

must be pinned to the commitments it gave. If Chrysler is to succeed in this country, the key to its success will lie very much in Detroit. Unless we pin down the American management to honour its commitments, Chrysler will not succeed. It will be an acid test of the Government's ability to make a multi-national corporation honour its commitments, which are essential to the national requirements of the United Kingdom.

Mr. Michael Marshall: The House listens to the hon. Gentleman with great interest, knowing his experience in the motor industry. Does he agree that if he is supporting the case for Chrysler he is doing so only at the expense of British Leyland? Is it not foolish to have this competition between these two parts of the motor industry?

Mr. Robinson: We have a much smaller motor industry in the United Kingdom, with fewer producers and fewer models, than many European countries. There is a perfectly good place for Chrysler within the United Kingdom and within the world-wide operation of the Chrysler Corporation.
Hon. Members opposite are continually braying about industrial relations. The problems of industrial relations are put forward as being the only one we have in British industry, and in the motor industry in particular. Hon. Gentlemen opposite understand that there are not only industrial relations problems but also problems relating to design and development, which have nothing to do with industrial relations. Moreover problems of industrial relations have nothing to do with those of manufacturing or technology, or even the ability to sell things, particularly abroad. All those matters are equally relevant to the problems we have to solve. Hon. Members opposite are ignorant of the real world and their outlook does nothing to provide a solution to the problems of industry.
None of this is meant to minimise the importance of good industrial relations. But strikes and the rest are not all the fault of the unions, or of the men. If hon. Gentlemen opposite do not believe me, let me given them a quotation from Don Lander of Chrysler, who I imagine has had as much experience in industry


as any Member in the House. The following quotation, from a brochure put out to the employees of Chrysler, says:
We have to accept that our old methods of management contributed to the crisis we faced. In future, we must be more sensitive, more participative and more communicative.
I cannot imagine anything further removed from the ideas of the hon. Member for Cirencester and Tewkesbury.
As to British Leyland, we would do well not to treat it here as a political football. Nobody opposed more than I did the particular scheme that was pushed through for the structural reorganisation of British Leyland. I should not have the privilege of being in the House had another scheme been adopted. Having said that, I maintain that it is vital that the company be given a period of respite from public criticism and from the concentrated, orchestrated, attacks on it made through the media and through the House. It should be left to get on with the job —but not for ever and a day, because time is limited. The reorganised company has had only 11 months so far, and when one considers it takes five years to bring a new model into production. With the company's deep-seated problems, that is not a long time.
Let us take it, particularly its organisational structure for a while, out of the area of political debate, in which in any case the problems will not be solved. Let us also remember that if we are to witness a one-sided minatory posture on the part of management against the men—I found this implicit in the remarks of the new chairman at yesterday's hearing—we shall not succeed either. The men will not yield to threats. They will not take to bullying. But they will respond to a challenge and to a genuine opportunity to participate and co-operate in the company.
I ask my right hon. Friend not to be too impressed with the would-be hard nosed pressure from the other side that the investment funds should be strictly held back and put forward only in line with improvements in the company. It is not an effective sanction.

Mr. Heseltine: The hon. Gentleman will understand, with his unique experience, that the hard-nosed approach came from the Prime Minister, when he indicated the way in which the Govern-

ment would support the company, and that it also came from the chairman of the company, whom the Secretary of State for Industry did not bother to meet before appointing him.

Mr. Varley: I did not appoint him.

Mr. Heseltine: I appreciate the niceties of the Secretary of State's excuses, but I want to ask the hon. Member one question. In the next few weeks British Leyland will have to take decisions involving hundreds of millions of pounds, because one cannot have an ongoing forward capital investment programme for new models without taking decisions on that scale. What scale of money would the hon. Gentleman believe it right to commit now, when the standards that are expected, in terms of improved productivity and performance, have not been forthcoming? How much money would the hon. Gentleman commit without adequate assurances?

Mr. Robinson: I really cannot answer that question without access to accounts, plans and proposals to which I am no longer privy. I do not know whether the hon. Gentleman has access to them.
Let us try to get back to the real world of industry. We all know that the money will be spent. We all know that it must be spent. It should be spent as soon as plans are ready. It is as simple as that. That is the answer I offer to the hon. Gentleman opposite.
In the context of industrial relations, I want to talk about one other venture that hon. Gentlemen opposite opposed with the same atavistic ignorance that they have demonstrated so amply today, and for which I am grateful to them. I refer to the Meriden Co-operative. There was a special debate, because the problem was considered to be very urgent. Let us consider what has been achieved in the first year—a year that was made triply difficult because of the delay, caused by hon. Members opposite, in setting up the co-operative by the collapse of NVT and by the tremendously difficult trading position in the United States market.
As I mentioned when I last spoke in the House, the co-operative goes into its second year in much better shape than that it went into in its first year. As to manning levels, the ratio achieved in terms of indirect workers to direct workers


is 1:5. That is better than anything that I know in any comparable engineering Industry in Britain or Europe. Secondly, a level of production of 350 motor cycles a week has now been achieved, with about 600 workers. That is compared with the figure of some 1,600 workers that the oracular pronouncements of the Boston consulting group considered would be necessary to produce the same number of motor cycles.
That example proves my point. It proves also what has consistently been put forward on the Government side of the House, in terms of what can be achieved with good will and co-operation between men and management. If we work together instead of fighting each other, and if we compete internationally in this way, we can achieve on a much wider scale what is now being achieved at Meriden.

Mr. Speaker: I did not want to interrupt the flow of the argument of the hon. Member for Coventry, North-West (Mr. Robinson), but it is out of order to address the House from within the Gangway. The hon. Member must stay within the seats.

6.09 p.m.

Mr. Richard Wainwright: I listened with great interest to the speech of the hon. Member for Coventry, North-West (Mr. Robinson), and was very glad to hear—and will accept—the good news that he brings us from Meriden. It does altogether surprise me. I appreciate that the hon. Member may have been drafted into the Chamber rather hurriedly to cover some of the nakedness on the Government Benches, but I was very disappointed to hear him, so soon after entering the House, make the bankrupt plea that a major recipient of public money ought to be spared the limelight of public attention. The idea that British Leyland can escape the public eye after the sacrifices that taxpayers are making for it—

Mr. Robinson: What I think I said was that the form of reorganisation that has been chosen for British Leyland should not be the subject of continued debate. I said earlier in my speech that we shall be discussing British Leyland and Chrysler frequently in the House, and that it is quite right that we should do so.

Mr. Wainwright: Yes, but the idea that the form of reorganisation chosen for Leyland can or should escape public attention is quite a hopeless proposition, because it is axiomatic in a democracy that any project which costs public money not only will be but always should be under very close public scrutiny. I felt that I must say that in order to resist any suggestion that this matter could be, even temporarily, taken out of politics.
In my view, it is one of the great objections to injecting fantastically large sums of public money into any concern that inevitably its management is then subject to the hurly-burly of constant political criticism. That is one of the debits which we have to enter when drawing up a balance sheet on nationalisation or public finance of industry.
The poverty of thinking in this pedestrian Bill almost rivals the lack of intellectual resource in the original Act of 1972. That is a great pity, because the way in which this legislation for helping industry has been drawn up—and the original begetters must bear the larger share of responsibility—regrettably plays into the hands of people holding the primeval views of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), who has now left us after his diverting contribution. There is no proper administrative framework, no proper system of monitoring the results of this public expenditure, no system of budgeting in a democratic way for the allocation of this money, and no system of comparing one applicant with another in a really ruthless way. Because all these elementary precautions are missing it is possible for critics with the stance of the hon. Member for Cirencester and Tewkesbury to make a heyday of the whole proposal, and this is very unfortunate.
In my brief contribution I do not intend to enter any total protest against the allocation of public funds for industry. Even in the regrettably poor framework of the Industry Act 1972 I believe that many notably good things have been done. The Secretary of State was right to say that I admired the way in which the wool textile scheme has been working out. If the hon. Member for Cirencester and Tewkesbury had been here, I would have taken him step by step through the fact that the application of the wool textile scheme under the Industry Act


greatly reduced employment in the wool textile industry and resulted in a very much better level of return from the labour employed. It was all done very carefully. There is an extremely good little NEDC for the industry, and the ground work was prepared with conspicuous care, in marked contrast to the rather shotgun performance that we have had during the past 12 months in respect of various parts of the motor car industry.
However, if we are to go on allocating such enormous tranches of national resources in this way the Government owe it to the British public to produce an orderly framework in which it can be done. It is very disappointing to find today that we are being asked once again simply to give statutory backing for the finance without any attempt to develop a proper framework.
I shall not labour this point because it has been made before from the Liberal Bench. In my view, there should be a provision for an industrial budget in which this House can hear from the Secretary of State the intentions of the Government, always subject to the emergencies of business and commerce, for at least six months ahead.
It is notable that the Secretary of State gave us virtually no clue in his speech about which industries are to receive the first tranches of this money. The whole proposal was presented to us on South Sea Bubble lines which, I am afraid, will make the foreigner who is watching us carefully feel that we do not know where we are going and that we are simply playing it by ear from day to day.
Secondly, since this kind of legislation has been in operation now for more than four years, surely we could have some system under the scrutiny of this House for comparing one applicant industry with another so that we might satisfy ourselves that industries are being treated fairly one against another, and, incidentally, that parts of the country are being treated fairly one against another, because up to now the regional distribution has been monstrously unfair and has indicated that those who shout loudest and make the most urgent threats will get most of the money.

Mr. Hal Miller: Surely there are also political overtones in the allocation.

Mr. Wainwright: I believe so. I do not want to moralise to the House—indeed, if I did I should have to include the manifest vote catching in some Conservative schemes, especially in the steel industry—but it is opening the door to political jobbery of a very dangerous kind, which, again, would be more likely to be avoided if there were some orderly procedure under which these vast sums could be kept within parliamentary scrutiny.
In regretfully having to make clear that I and my hon. Friends intend to oppose this measure I conclude simply by saying that there would be no need for public finance on anything like this massive Scale if only the economy had been and were being managed competently. What is, at heart, the reason why so many industries are likely to be queuing up for participation in what is permitted by the Bill is that the rates of commercial interest which they would have to pay if they approached the normal sources of finance are quite beyond the capacity of a normal manufacturing enterprise. We have reached a stage, owing to our economic mismanagement, where we are having to maintain a rate of interest that makes it impossible for anyone conducting a normal type of efficient manufacturing enterprise, without some whizzbang product or a monopoly position, to hope to be able to pay the bank the present monstrous going rate, which is a Government responsibility, and also produce a reasonable return on the capital employed in it.
In that position, it is regrettable that this House is asked simply to alter the figures in legislation which was badly conceived at the start and which has never been improved during the four years in which it has been in force.

6.19 p.m.

Mr. Hal Miller: Following the excellent contribution by the hon. Member for Collie Valley (Mr. Wainwright), who made a number of my points for me, my remarks will be briefer than I originally intended. I pay tribute, therefore, to the clarity of the hon. Gentleman's thought and to his presentation.
I must say that the performance of the Secretary of State today was well below that which the House not only has come to expect of him but has the right to expect of one of Her Majesty's leading Ministers. I am sure that if he has his remarks put before him tomorrow in his Department he will feel some sense of regret.
The right hon. Gentleman set out to pretend that his Government and his Department had attempted to improve the operation of the Industry Act. He referred in particular to the introduction of the Industrial Development Advisory Board, provision for which he was taking credit for having inserted in the original Act. He went on to talk about the criteria. This, coming from a Government who have consistently overruled or neglected the advice of the Industrial Development Advisory Board on such projects as NVT—I shall come to the remarks of the hon. Member for Coventry, North-West (Mr. Robinson) shortly—really sticks in the craw. I do not know how the right hon. Gentleman has the gall to make such statements.
As for the criteria, we are still waiting for a public announcement of the criteria that are, for instance, to be applied to British Leyland when the next tranche of money is to be made available. All the Questions I put down in the House trying to elucidate these criteria have met with no satisfactory response at all. I hope hon. Members will agree, if they were present at the meeting yesterday of the Sub-Committee—I regret that so few were there—which is inquiring into the motor industry, that it is apparent that these criteria do not exist and had never been communicated to the company. How it was to meet its objectives and on what basis the Government are to make the next tranche available is obscure. All we are told is that more money is to be provided in the Bill for more enterprises but without the necessary criteria.
I have some sympathy with the remarks of the hon. Member for Coventry, North-West. The Secretary of State, in attempting to justify this increase in money, did not even refer to his own Government's inflation. There was no going back to the 1972 levels of money. Why? It was for the very excellent reason that the

spendthrift Government he represents have even outstripped their own rate of inflation. The attention of the hon. Member for Bolsover (Mr. Skinner), who is so interested in financial speculation, would be far better turned to the activities of his own Government.
There is no end to it. That is the other very interesting admission we had from the hon. Member for Coventry, North-West, and this is one of the difficulties we are now in. I agree with the hon. Member that once one is in this position something has to be done. We cannot simply pretend that it has never happened, because the public's ability or willingness to pay the taxes has a limit, as has the willingness of foreign lenders to extend credit. We must have some limit on the amounts of money which are being made available in this way.

Mr. Nicholas Fairbairn: Does not my hon. Friend feel that it is particularly absurd to squeeze industry to the point of death by taxation and then to use the money thus removed to give it back a little life in the most inefficient possible way which may be achieved by the use of money?

Mr. Miller: Yes. I am grateful to my hon. and learned Friend.
That brings me on to the remarks I was about to make. I had turned to the subject of inflation and its effect on industrial cash flow and the need for funds. This has not only affected the value of stocks. Interest rates coming on top, as a result of the Government's borrowing policies, have also heavily penalised companies which have to hold large amounts of stocks as part of, for instance, the assembly process in a motor manufacturing company.
Companies have also been squeezed by absolutely rip-roaring wages once the flood-gates were completely opened in order to buy the October 1974 General Election. That was what happened in 1974. That election was bought, and everybody is now paying the price for it. Companies have also been squeezed by the operation of price control. The remarks of my hon. Friend the Member for Bridgwater (Mr. King) were very apposite in this respect.
While welcoming the Minister of State to his new responsibilities—we do so


genuinely—we regard him with some suspicion as to whether he is a sheep in wolf's clothing or a wolf in sheep's clothing to be led like a lamb to the slaughter like other Treasury Ministers. This remains to be seen. But Mr. Beckett, the managing director of Ford's, in an interesting address to Aston University, made clear the adverse effect of price control schemes on investment in the motor industry and why his company had to abandon several large investment projects. I know that he has discussed this with the Minister's former Department, and I hope that in his closing remarks the Minister will deal with this.
Successful companies have been squeezed. The money has been taken by the Government and is being redistributed to companies which have been unable to continue to operate in the circumstances which the Government have created. There is a double burden on success. Success is penalised and failure is rewarded. That is the motto of this Government's industrial policy. We are not considering social policy here; we are trying to consider the creation of resources necessary to sustain the country and its population.
To come to the British Leyland situation and the funds which will be needed for that company, I have great sympathy with the remarks of the hon. Member for Coventry. North-West and I greatly admired his presentation. But I rather regretted that his "cheapjack" crack at Question Time about the British Leyland management was not in character and did not accord with the more responsible note he was striking this afternoon.
On the question of the British Leyland situation and the funds which will be required, the next tranche of funds will not simply be £100 million. We are not discussing £100 million. The Bill inevitably means that the whole programme must go through. I agree with the hon. Member for Coventry, North-West that we are deluding ourselves if we imagine that it is only £100 million for the next investment stage. The whole amount has to go through if it is to go ahead. It is in that sense that I understood the remarks yesterday morning of the chairman, which I heard personally, that the board might not be able to recommend it. I do not think that this was an attack or militancy or bluff in any way. What

he was trying to say, in answer to the Select Committee's questions, was that, if the performance of management and men—I do not make a distinction—in the company did not give the board confidence that the whole programme as originally proposed could be carried through, it might feel it necessary to recommend against it.

Mr. Robinson: Since the members of the board are responsible for the management of the company, that would surely be a vote of no confidence in themselves. Does the hon. Gentleman really think that that was the spirit in which Sir Richard Dobson made his remarks?

Mr. Miller: I had the advantage of listening to the whole of the evidence. The hon. Gentleman was not present and he has taken an extract from the newspapers. If he is misquoted as often as I am, he will realise how damaging such things can be. I was being interviewed by a journalist this morning on this very point, and I tried to explain what the effect of the chairman's remarks had been in the Committee. I assure the hon. Gentleman they were entirely responsible. What he was saying was that, if there was unnecessary delay or a commitment to success was not achieved in the corporation, he and his colleagues would feel it their duty to recommend that the whole programme as originally envisaged should not go through. If the Government still wished it to go through, presumably they would feel the need to resign
For the Secretary of State to tell us, however, that these funds are restoring an internationally competitive position in the company, and to pretend to us that criteria are being laid down and that the Government have a strategy when we have the example of Chrysler, is too much to stomach. It was nearly too much for the Secretary of State himself to stomach, according to the remarks he made at the time—unless he intends to tell us that he was misquoted by the Lobby Press.

Mr. Varley: The hon. Member said that everybody was misquoted.

Mr. Miller: The Chrysler decision was taken against the whole trend of the Government's own industrial strategy and has seriously weakened, on their own admission, the competitive position of


other motor car manufacturers in this country.
This is where I agree with my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). There is a real danger that the spending of public money in this way, unless it is carefully monitored and criteria are set and met, will inevitably weaken the country's whole industrial strategy. That is the danger with Chrysler. We shall not have Chrysler assembly operations in Coventry. British Leyland has now announced that the assembly at Canley is to end. This weakness will spread throughout.

Mr. Varley: The hon. Member is going on at great length about the criteria for assistance to British industry. He acknowledges that no criteria at all for British industry were published when the 1972 Industry Act was laid before the House. I know that he was not here then, but he was a Conservative Party candidate during the 1970 election and he knows something about these matters. He is a leading man in the Conservative Party. What criteria did he think the then Government were following with Rolls-Royce, the nationalisation of Govan Shipbuilders Ltd. and the assistance given by Mr. Christopher Chataway to NVT? What precise formula was laid down by the then Conservative Government?

Mr. Miller: I shall discuss the question of NVT, about which I know a little, but on the other matters I am not well informed.

Mr. Robinson: I wanted to go back to the hon. Member's point about Can-ley and the linking of that to the continuation of Chrysler operations. He is surely not seriously suggesting that there is any link between the continuation of assembly by Chrysler in the United Kingdom and the removal of the assembly operations from Canley to an under utilised assembly facility of British Leyland at Solihull so that the space at Canley can be used for an enhanced and expanded machining operation.

Mr. Miller: The hon. Gentleman knows that that is not the whole story behind Canley, but there is not time to go into it now. I shall discuss it with him outside the Chamber.
What I was trying to illustrate in my remarks about Canley was that the competitive position of the industry, far from being strengthened, can be weakened by propping up too wide a range of industry which cannot succeed in the light of the over-capacity of the motor car industry.
But I must return to the Secretary of State's point about the criteria for NVT. This was a carefully-prepared plan for reducing the number of motor cycle factories from three to two, concentrating the manufacture, enabling a new range of models to be produced with sufficient backing to withstand the competition. The only result of this Government's action in insisting on keeping the three factories—I shall come to the Meriden co-operative in a moment; I am not discussing the merits of Meriden as a cooperative and NVT as a company—was to ensure that another factory closed. There never was room for three factories: there had to be two. As a result of the Government's action, we have ended up with one. But there was a clear business plan before money was originally put into NVT. There was a carefully-thought-out approach.
To come back to NVT and the remarks of the hon. Member for Coventry, North-West about its success at the moment, the interesting point, as he himself made clear, is that the manning level, now that it is run as a co-operative, is far reduced from that which obtained when it was operating under the Triumph Company. Similarly, the industrial record has been a great deal better, but that is not as a result simply and necessarily of public money being poured in.
To conclude, the Secretary of State this afternoon—

Mr. Varley: Is the hon. Gentleman going to say nothing about Rolls-Royce?

Mr. Miller: I am not familiar with the circumstances of Rolls-Royce. I have dealt with subjects about which I know something. I am not a speculator. I am not informed on this subject and—unlike some people—I do not see why I should pretend to be informed when I am not.
The Secretary of State has failed the House today in his obligation to provide us with a clear indication of what this additional money is to be used for, the


manner in which it is to be spent, the manner in which that expenditure is to be controlled and monitored and the rôle, if any, that the House of Commons will be able to play in that process. These are real and serious questions. As the hon. Member for Coventry, North-West made plain with the British Leyland situation, we have not yet reached a satisfactory basis for ensuring the necessary industrial continuity, and at the same time the public accountability about which we hear so much from the Labour Party is never, in effect, put into practice.

6.36 p.m.

Mr. Stan Thorne: I am sorry, but I, too, shall have to talk to some extent about public accountability. My hon. Friend the Member for Coventry, North-West (Mr. Robinson) was taken up by the hon. Member for Colne Valley (Mr. Wainwright), but I suspect that his point was that, once public money had been put into British Leyland and Chrysler, we should allow them the time to organise themselves so as to use it effectively. At no time did my hon. Friend say that there should be no accountability in respect of that money.
I notice that the hon. Member for Colne Valley and the rest of his party are no longer here, even though they have decided to vote against the Bill.
I find it difficult to understand the point of the hon. Member for Colne Valley and Conservative Members. They say that they are not prepared to support a measure which assists industry. Yet, as the Secretary of State said, that is precisely what they did—rightly, in the circumstances—a few years ago when public money was necessary to protect the jobs of Rolls-Royce and other workers. I welcome the decision to increase investment in this industry.
What perturbs me is public accountability. Massive sums of public money have been put into private industry in recent years. I am not sure that the public have ever had a real assessment of how effective that investment has been over time. That applies to the previous Government and to this Government. I hope, that at least the Secretary of State will give assurances about follow-up action in respect of some of the money

which will be used when the Bill is passed.
There are some areas I would commend to his attention. It seems to me that a further Government input to NVT would be valuable. It has perfected a new motor cycle engine which could be a substantial winner in world markets. The present attitude of the Department of Industry to NVT should be reappraised.
I turn next to a situation which has recently developed at Seddon Atkinson in my constituency. Seddon Atkinson is part of a multinational, International Harvesters. It makes motor trucks, in competition, obviously, with importers of the Swedish Scania truck. When workers in this firm face redundancy because of decisions taken outside Britain by International Harvesters it is relevant to consider in what way we can intervene. I favour the utilization of the National Enterprise Board in planning agreements for this purpose. It seems to me that some of the arguments put at the time the Labour Party was creating the concept of the National Enterprise Board envisaged, where employment prospects of British workers were threatened by the activities of multinational companies, that there would be an intervention by a Labour Government to protect those jobs. Here is a classic instance where that could be done. By establishing planning agreements, by ensuring some control on the imports of Scania trucks, for example, we could improve employment prospects.
I hope it may be possible for the Secretary of State to indicate why it is necessary by this Bill to increase the amount of money for FFI without strings, whilst the National Enterprise Board faces economic difficulties about the amount of money available to it. There seems a certain ambivalence on the part of the Government in this respect. I would prefer to see an increase in the amount of Government inputs into industry where they intend to establish planning agreements, where they intend to be involved in the decision making in those industries, rather than feeding money to certain sectors through FFI, where the degree of accountability leaves much to be desired.
Whilst I indicate my intention to support the Bill, because I am quite certain


these inputs are necessary, I would like the Secretary of State to address himself to those criticisms—if that is the right word—when he winds up this debate, which, I hope, will not be too late.

6.40 p.m.

Mr. Neville Trotter: I am appalled at the size of this proposal. It suggests that the Government are considering for years ahead, massive artificial aid for industry as an alternative to the healthy and prosperous industry that we should be seeking.
Looking at this Government's record we see that their first act in 1974 was to impose higher taxes on companies. Then there is massive inflation coupled with price controls. Everything that has been done has made industry sickly and made it difficult for industry to make a profit and reinvest. The acts of this Government have not been conducive to a healthy industry. I do not believe the massive artificial aid suggested today is a step in the right direction. No doubt some aid to industry is necessary, but not on this massive scale. It is an attitude of defeatism, of suggesting that the future is very gloomy indeed.
The Chancellor of the Exchequer stated in the Budget debate:
I appreciate that the availability of finance is by no means the most important determinant of investment. The outlook for demand and the prospect of profits arc both crucial to investment decisions."—[Official Report, 6th April, 1976; Vol. 909, c. 251.]
That is true. Those are the factors sadly lacking in the economy today. What is needed is a return to more normal trading conditions and to a normal state of the economy, rather than the introduction of massive artificial aid.

Mr. Fairbairn: Does my hon. Friend appreciate that, for the average constituency, the proposed increase is £2 million? What are the criteria upon which that sum is to be raised?

Mr. Trotter: I entirely accept that, and I shall come later to which constituencies are the beneficiaries. Certainly, little of it has been seen in my area, and perhaps it has also not been seen in my hon. Friend's constituency.
I have not been convinced by any arguments from the other side of the House as to the need for this massive

scale of increase. We have had a figure of £315 million as being committed to date, half of it, £165 million, for Chrysler. We have been told of commitments of only £150 million for all the other schemes. I have the impression that each of the other schemes has been fairly small. The limits in existence under the original Industry Act provide for a further £235 million being made available by means of orders. With that amount of money still to spend, why are the Government dashing into raising the limit to the staggering figure of £1,600 million? Could it be that the Government consider more tragedies are likely to occur? Are there to be more Chryslers? This seems the most likely explanation. If this is the scale of the aid needed, there must be some serious catastrophies ahead of us.
Presumably there will be repayments made of some of this money for some of it is in the form of loans. Are not these loans eventually to be repaid? Surely money is to flow back into the fund? It is incredible that there are apparently no plans and no justification for expenditure on this scale.
It is also incredible that at this time there are only two Members of the Government party present in the Chamber. For a large part of the debate we have seen only a handful of Members on the Government side of the House. We are being asked to agree to £800 million for each of the two Members of the Labour party now present in the Chamber. It is an extraordinary state of affairs. It shows a lack of interest in this massive spending by the Government. They have become so used to the spending of money on this scale that it no longer concerns them.
Where is the money coming from? It is coming from one of two sources. Either from taxation on the individuals in this country or on those businesses fortunate enough still to be able to make profits; or, more likely, from borrowing abroad. What are the foreigners to say about this? They are the people we now depend upon to balance the books of this spendthrift Government. What are they to think when the Government cannot even persuade their supporters to sit and listen to, if not take part in, the arguments on the spending of a further £1,600 million?
My hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) mentioned £2 million for each constituency. Where has it all been going? Not much has been going to the North-East. I hope the Minister in his reply will correct me if I am wrong, but I have yet to hear of any large-scale developments on Tyneside as a result of the spending of this money. There are no proposals for future large developments there. The people on Tyneside are involved either in paying the taxes or in repaying the borrowing from which the money is emanating. There has been a cynical use of a large amount of money in the past to buy votes in Scotland. I do not know if that is the intention of the Government for the future. Certainly I cannot support this measure.

7.50 p.m.

Mr. Tony Durant: I wish to intervene for a few moments because I am anxious about the subject of national expenditure. What a moment this is to be discussing this subject when we consider what has happened to the pound in the last few weeks and the position regarding all matters of finance in this country!
We are asked to pass a measure without knowing where it is going, what it is for and exactly where it has come from. It seems incredible that we have a Government who say that local government must have cash limits, which is a good thing and with which everybody agrees. Then we say that we must put cash limits on the nationalised industries, cut down on their enormous subsidies and show some control and accountability. We say that the workers of the country must have some control on their wages and that that must be by negotiation. We say that middle management must play its part by some form of control. But when it comes to the Government, they have a blank cheque. They have a large sum of money, but there is nothing specific about where it has come from or how it is to be used. This is not good enough.
I agree with the hon. Member for Colne Valley (Mr. Wainwright), who rightly said that there is no accountability. I sympathise with the former Labour Member Lord George-Brown, who in his day tried to have a national plan. At least some attempt was made

to show some direction of industry. Instead, we have a hotch-potch of help, irrespective of what happens, to those who need help, without rhyme or reason or any concerted direction.
Who are the creators of the wealth that we need? They are the profitable businesses, particularly small businesses. A small business would get short shrift if it went to the Treasury and said: "This little company of 20 employees is in financial difficulty." I should not think that it would get much money from the Government. It is always the large concerns which make the big losses and create the problems which get the money. The wealth creators—private enterprise—are left out in the cold. They are taxed and penalised in every direction.
My hon. and learned Friend the Member for Kinross and West Perthshire (Mr. Fairbairn) referred to £2 million per constituency. We should repeat that figure again and again. Our electors should know that this evening we are being asked to pass a Bill which will put that kind of strain on their pockets. Is that what they want? Will they be prepared to do it?
My experience in my constituency is that most people are fed up to the back teeth with taxation. It is one of the great problems of our nation. When I visit parts of my constituency and talk to the ordinary working man, he shows me his pay slip and says "Is it worth it? Should I bother to do any overtime? What is the point? I am not getting the return." Therefore, he does not bother, and laziness creeps in. That is perfectly understandable.
Again, why should middle management executives worry and sweat if they are unable to take home the money they have earned? They understand that they are getting a certain amount, but the pound notes in their pockets are so much less because they are taxed beyond belief.
We should work towards the creation of private wealth. We need risk capital. At the moment, our main investment comes from overseas or from establishments—for example, insurance companies—which go only for safe investment. We need speculative money. That will come only from individuals who are


prepared to take a chance by putting their savings into something which has an element of enterprise and might grow. We shall not get that kind of investment with this Government's approach, because they spend money liberally.
I am reminded of the Sorcerer's Apprentice who thought that he could take a short cut by a little magic. He got the thing going, the buckets were moving marvellously using the brooms, but the whole thing got out of control and he could not stop it. More and more kept coming. In the end the whole place was a mess. He was using only a bit of simple magic to put the thing right, as he thought. I suggest that that is the Government's approach. They appear to think that it does not matter. They think that they are oiling the wheels and getting the thing going. But that is the Sorcerer's Apprentice's approach, and the situation will get worse.
The hon. Member for Bolsover (Mr. Skinner) was right when he said that the choice was whether to go the whole hog and nationalise everything. The Government are moving in that direction. The hon. Gentleman was right when he said that they will be back later for more money.
That kind of approach worries me greatly. That is why I have come to listen to and take part in the debate. It is appalling that we should be asked to give a blank cheque for this money without knowing where it is going. I ask my hon. Friends to come into the No Lobby with me.

6.55 p.m.

Mr. Geoffrey Pattie: It is a matter for regret that we shall have to wait until tomorrow to read in the Official Report the considerable number of gems left behind by the Secretary of State. It is a pity that we do not have them here to feast our eyes upon them now.
The right hon. Gentleman said that the Bill would mean that control by this House would be even tighter. I am sure that my hon. Friends will find that statement as unreassuring as I did when they recall, as I do, the huge sums of money

that we have ladled out under Section 8 procedures in the last few months—usually as a result of the special 90-minute debates late at night.
This wretched little Bill is a grossing-up exercise which is a clear condemnation and some indication of the Government's economic mismanagement. For what was previously to be £150 million we now have to read "£600 million", and for £100 million in another part of the Bill we have to read "£250 million".
Labour Members—if there were more than three of them present—would find it hard to understand our concern that the Government have no idea what they will do with these sums of money when they have doled them out. We share their concern for the plight of people who are caught in the economic cross-fire and whose jobs will be at risk, but we feel no reassurance that the Government have any kind of monitoring procedures over what will happen to this money We know full well that it will be only a short time before they come back with another appeal adding further noughts to the figures in the Bill. That is the frustration which is felt in the House of Commons. Hon. Gentlemen talk about accountability, but that is to make a mockery of the English language, apart from anything else.
The Secretary of State, in one of his more casual asides, said that the liabilities under the Chrysler agreement were unlikely ever to be called. I should have thought that most people, apart from the Secretary of State in his more optimistic moments, were aware that the Chrysler deal will not work.
The Industrial Development Advisory Board has considered it unlikely that Chrysler will achieve viability after 1980. The head of the CPRS said that it would be a great uphill struggle. Indeed, no less an authority than Mr. Terry Beckett, of the Ford Motor Company, only this week said that by 1980 there will be excess capacity in the motor industry of between 480,000 and 1·1 million vehicles. That is the kind of back-drop against which the Government are making these absurdly optimistic assessments about the future of Chrysler.
The hon. Member for Basildon (Mr. Moonman) wrote an open letter to Mr.


Riccardo in The Times on 1st March in which he said:
And a critical assessment of the terms of the Government deal reveals that it lacks any sense of operational urgency or managerial instinct or competence … a two-year 'make or break strategy' … is no more than a figment of an optimistic, zealous imagination.
There seems to be no business plan, no investment strategy, no sense of direction —other than a short-term job-saving operation—and no proper assessment and monitoring of how it will work. The money is being taken and poured over the side. No statements of which I know have been made regarding what control mechanism is being established to monitor the progress of this operation. The prospects for Chrysler are as grim as they could possibly be. Yet the Secretary of State said that it was unlikely that the liabilities under the Chrysler agreement would ever be called. If this were not such a tragic matter, it could be part of the plot in a Gilbert and Sullivan operetta. It is probably just as well for the Secretary of State for Industry that those two talented gentlemen are no longer with us.

7.0 p.m.

Mr. Nicholas Fairbairn: It would defy the intelligence of anyone to believe it possible that at this time, with the present state of the pound, the Government should propose an increased allowance in their spending of £1,050 million. That is nearly £2 million for each constituency, or in the case of my constituency, which has one-thousandth of the country's electors, £1 million. That is the level of this irresponsible legislation, forgetting everything else such as the borrowing requirement of £12,000 million.
One might ask the Minister of State where the money is coming from. Either it will be borrowed, which it probably cannot be—and if it is borrowed it certainly cannot be repaid—or will be removed by taxation from the very people it sets out to benefit. Nothing could be more inefficient than taking money out of industry and feeding it back through the Government. That is the worst way to use money.
When a drunk, bankrupt profligate is signing cheques, one is entitled to ask what he wants the money for. When

a man is in debt to the extent that this country is—and our creditors have no confidence in our capacity to repay—and he goes around the streets saying "I want another £1,000 million. I just want it.", one is entitled to ask why he wants it. That is what the Government are saying, yet they have not put forward a single proposal for this money. They are going to spend a lot of money, yet they are not prepared to say upon what or why.
What justification is there for such an astronomical figure, even in the devalued state of the pound? The Government have turned £3 into the worth of £2 both at home and abroad. In an ordinary household, one has a duty to keep in some balance one's outgoings and incomings. In a state of bankruptcy and debt, which more than anything is the cause of the collapse of the currency, the Government constantly waste and spend money they have not got and cannot borrow.
Before the Government add another £1,000 million to the £12,000 million borrowing requirement, they should tell us where it is coming from, say specifically what it is for and give us the basis for choosing their figures. Why £1,000 million more? Why not £800 million or £100,000 million? There are no criteria upon which the House is being asked to vote money for unknown projects with no control.
This is a total fairyland and fantasy in which the House of Commons thinks that it is entitled to do what no one else can do—that is, spend money it has not got on projects it does not know by criteria it does not announce. That is the habit of a man without sanity. The one thing which is making the world laugh at us is seeing in power a team which is so out of touch with reality that it imposes upon itself no financial restraints and gives no explanation of its profligacy.

7.5 p.m.

Mr. Nicholas Winterton: I wish to raise a matter of considerable importance. The Government have come to the House asking us to sanction a large sum for them to spend. Much of it is likely to be spent on inefficient industry which in turn will have to be subsidised by what remains of the efficient private sector.
I want to draw the Government's attention to Group 20 based at the Manchester Business School. This is a group of redundant skilled, experienced and qualified executives who have applied to every Government agency for small sums to help them set up projects to provide not only them but many other people with employment. Every Government Department has completely disregarded the group's applications, saying that its brief does not permit it to give such aid.
Here the Government are asking the House to write out a cheque for £1,050 million, most of which, as has been said, looks likely to go to the highly inefficient, out-of-date industries. Yet this group of young, skilled and qualified people cannot obtain any financial assistance from the Government. These people are middle management. They are skilled entrepreneurs who often provide employment for the ordinary working man and woman. They are the seed corn of future prosperity and expansion, yet not a single Government Department is interested in them.
I hope that the Minister will have the courtesy to listen to what I am saying. I am appealing on behalf of people who are out of work because of the evil, pernicious and irrelevant measures followed for two years by the present Government. These people want to work. They were made redundant and their unemployment was not of their own making. British Leyland is getting hundreds of millions of pounds of taxpayers' money—British Leyland, where irresponsible action by certain sections of that company has put people out of work while the position of those sections is guaranteed at taxpayers' expense. But the position of people who are not represented by powerful trade unions is of little interest to the Government.
I do not believe in State handouts to lame ducks, but I believe in ensuring that the seed corn of skill is properly used and encouraged so that public money is not wasted and unemployment is reduced.
The Minister might ask his civil servants to look into the letters I have sent to Government Departments about Group 20, who are the sort of people who represent the future prosperity of the country.

7.10 p.m.

Mr. Michael Grylls: This is a singular parliamentary occasion, marked by the absence of Government supporters. When the Secretary of State introduced the Bill only one Government supporter was present—the hon. Member for Bristol, North-East (Mr. Palmer), who has now left the Chamber.

Mr. Skinner: What about me?

Mr. Grylls: I shall come to the hon. Member for Bolsover (Mr. Skinner) in a moment. A few hon. Members were brought in, including the hon. Member for Bolsover —

Mr. Skinner: Will the hon. Gentleman give way?

Mr Grylls: I shall give way in a moment. The hon. Member for Bolsover came in and made one of his usual speeches, pulled out of the appropriate drawer, and disappeared quickly. That was the extent of the Government's interest in the Bill. The hon. Member for Bolsover, having been brought in by the Whips to make his speech—he had been talking to journalists outside—did not reappear during the rest of the debate. He went out quickly to resume his conversation with the journalists—about what, I do not know—and the Government Benches were left empty.

Mr. Skinner: As I told the House, I was engaged in telling the Press about the irregularities and illegal currency dealings at the Bank of England. That meant that I had to come in late to the debate, and leave early. As for the inane suggestion that the Whips told me to come in to make a speech, the hon. Gentleman must be out of his tiny mind.

Mr. Grylls: That is as may be. I shall leave the hon. Member for Bolsover to his journalists and witch hunts. It is more important to consider the Secretary of State's speech. This mammoth Bill—perhaps the most extravagant that has ever been introduced in the House—was introduced by the Secretary of State in a cheap and unworthy manner. I say that, having listened to him on many occasions and having some regard for him. The hon. Member for Colne Valley (Mr. Wainwright) put it well when he said that the Secretary of State had dealt with the Bill in a South Sea Bubble fashion.
He made a few party points against the Conservatives, which might have been good in a constituency speech on a Friday night, but he had almost nothing to say about the Bill. That was an abuse of Parliament and the legislative process. We in Parliament are used to being abused and insulted by the Government, but that was an abuse and insult to the public at large, who will have to pick up the tab for the Bill.
The expenditure proposed in the Bill is on a scale that would have been unimaginable two years ago. If one adds up the £1,600 million authorised by the Bill, the £1,000 million allowed for the National Enterprise Board, and the £1,400 million granted to Leyland, the staggering total is £4 billion—£222 for every household in the land. That is profligacy gone crazy. We have seen some examples of profligacy by the Government, but this one takes the biscuit.
As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, the Bill was introduced in a spirit of defeatism, in the belief that the way to solve our industrial problems is to throw around more money. All that a Government bankrupt of ideas can think of is to throw money around. As my hon. Friend the Member for Reading, North (Mr. Durant) said, the Bill represents a blank cheque up to £1,600 million.
The Secretary of State did not say what the money was for. Had he come to the House with a well presented case and told us where the money would go and what return there would be on this huge amount of taxpayers' money, we might have been convinced, but he did not even do us the courtesy of telling us that. He referred vaguely to the offshore scheme needing more money. We are doubtful about that because, according to our calculations—I should be grateful if the Secretary of State or his hon. Friend the Minister of State, who is to wind up the debate, would listen—

Mr. Bob Cryer: He has nothing to say.

Mr. Grylls: I hope that the Minister of State will have something to say. The Secretary of State has said nothing about why we need the Bill. I hope that the Minister of State will say for what the money is needed, and why it is needed

in April 1976. According to our calculations the two further tranches available under existing legislation, by order, should last for another year.
A few weeks ago we considered the public expenditure White Paper. That must have been prepared in February, but it contained no reference to this expenditure. When the Government prepared the White Paper in February, if they expected to need this money why did they not include it? We knew that the White Paper was incorrect. What happened between February and now to convince the Government that they need more money? The figure mentioned for this purpose in the White Paper is £770 million. Where will the Government get the other £900 million? Will it come out of contingency reserves? I notice that assistance to industry is not included in the cash limits referred to in the White Paper. I am not surprised at that.
In his speech in the Budget debate the Secretary of State spoke of his industrial policy as being modest. We did not know then that this Bill was coming along, but he gave us a clue when he said that the momentum was quickening. We did not think that it would quicken to such an extent that we should be asked to vote for a further £1,600 million. If that is a modest policy, what is an immodest policy?
The hon. Member for Colne Valley made a sensible comment about the Industry Act that was introduced by the previous Conservative Government. He said that well-thought-out schemes such as the Wool Textile Scheme can do tremendous good. The majority of schemes put forward by the Government have been shot-gun performances. For example, there was the Chrysler scheme—that will not be successful. How many more shot-gun schemes will there be? If well-thought-out schemes are available in the Department, why are we not told about them when we are asked for the money? In which departmental drawer are they—or have we rumbled it, and are there no well-thought-out schemes, and is the money needed just to react to events and disasters?
In his speech in the Budget debate the Secretary of State said that the key to industrial success was a reduction in the rate of inflation and an increase in


productivity. I agree with him. He did not mention overmanning. Does he believe that wild spending under Section 8 of the 1972 Act, as proposed in the Bill, will help to achieve industrial success? Our answer is that it will not. We further believe that the expenditure of this extra money will make inflation even worse. Most people in the country and in industry would accept that that is so.
There is no proof in any country in the free world that the direction of capital on a massive scale like this will do any good for industry. In fact, it will do positive harm. It will distort the market and make it more difficult for successful companies to raise money.
This policy is one more step down the road to a regimented economy. Grants on such a scale are not suitable for use under the 1972 Act, which is one of the reasons why we shall vote against the Bill.
We do not believe that there is sufficient machinery to carry out the aims of the Bill. The Industrial Development Advisory Board has done some good work, and it is not sensible for the Government to ignore its advance. In 1974–75, the Government overrode the board's advice on five occasions, for political reasons, including the aim of getting votes in Scotland and Coventry. The choice of resource allocation by the Government will always lead to disaster, certainly when it is done on this scale. It will also lead to the erosion of a free society.
The Government should be improving market forces and helping profitability in industry. The Chancellor of the Exchequer seemed to recognise this need in his Budget speech, when he said it was important that there should be profitable industry. If there is profitable industry, money is available for expansion. The trouble is that, under this Government, industries which have been successful—like the British Aircraft Corporation, which has just announced record profits and record exports of £200 million—are nationalised. What incentive is that to industry? The accolade for success is nationalisation.
In the Washington Post article, which has been much quoted tonight, Mr. Hugh Mulligan wrote:

In the delirium brought on by the British disease, economic dreamers on the far left saw Britain rising from her sickbed in shining socialist shrouds as 'the Yugoslavia of the West'. Aghast Tory traditionalists saw her in danger of becoming 'just another seedy socialist republic.'.
I do not know whether I am a Tory traditionalist, but I do not want our country to become a "seedy Socialist republic". The Bill is one more step in that direction.
I hope the House will show its anger and disgust at the frivolous way in which the Bill was introduced by the Secretary of State, and at the Government's impertinence in bringing it forward. It is an arrogant and irresponsible act, at this time of economic crisis, to produce this Bill—this bit of paper which will cost the taxpayer £1,600 million. Never has there been a more expensive piece of paper.
The Industry Ministers are not bad men—but good men advocating foolish measures are just as dangerous to industry and the country. That is why I ask my hon. Friends to vote firmly and decisively against this disgraceful Bill.

7.24 p.m.

The Minister of State, Department of Industry (Mr. Alan Williams): I hope that it will not detract from the atmosphere of indignation which the hon. Member for Surrey, North-West (Mr. Grylls) has produced, in himself if not in the whole House, if I start by thanking hon. Members opposite, especially the hon. Member for Bridgwater (Mr. King), who have been kind enough to welcome me to the industrial scene. I noted that in nearly every case there were certain doubtful remarks about my departmental antecedents, and no doubt I shall have to live down my disreputable past in this new post. In their first week or so in office new Ministers are easy sport, so no doubt we shall have some interesting exchanges during my speech.
If the incredible allegation by the hon. Member for Surrey, North-West that the Government Whips had dragooned my hon. Friend the Member for Bolsover (Mr. Skinner) to take part in the debate were true, I would take up the matter with the Whips' Office. However, I am aware that the Whips are not necessarily the most influential force in the House as far as my hon. Friend's activities are concerned.
The purpose of this legislation is to increase both the initial tranche and subsequent additional tranches provided for under the Industry Act. The initial sum, which was previously £150 million, becomes £600 million and the subsequent four tranches are increased from £100 million to £250 million. However, each additional measure will still require a resolution in the House and will therefore be subject to further discussion.

Mr. Lawson: If the Minister wants to get £1,000 million in additional tranches, he could have increased the four tranches of £100 million to 10 tranches of £100 million. That would have maintained parliamentary scrutiny at the same level as before. By increasing the four tranches to £250 million each, he is taking power away from the House and reducing parliamentary scrutiny.

Mr. Williams: I am trying to cover as many of the points made in the debate as possible. The question of control was raised in several speeches and, although I understand why the hon. Member raises it now, I shall be dealing with it a little later.
We have already approved two of the tranches under the existing scheme. The current limit is now £350 million. However, we have commitments amounting to nearly £320 million on further projects, including some under the Accelerated Projects Scheme. It is highly likely that we shall reach the ceiling of £550 million this year.
Hon. Members have asked why we have provided for so large an increase. We have tried to be as straightforward with the House and the public as we can. I am not making a party political point, but under the existing Act the revenue which has to count against the statutory limits comprises guarantees and net payments which have actually been made. We feel it is right not only to take into account the payments made, which is what the Act appears to require, but also that, in judging whether we are near the ceiling, we should take into account future commitments, whether for next month, next year or five years' time.
We are grossing up everything and making the figures appear larger because we are not taking account of any money

which may be trawled back. We are trying to give a more variable assessment —[Interruption.]Conservative hon. Members said that they wanted to hear an explanation. I am trying to give it as fairly and honestly as I can. The point to bear in mind—this can be demonstrated by looking at the figures to which we are currently committed—is that we have obligations marked against the statutory limit of £121 million. In fact. we have entered into commitments for the future of another £192 million. We are accounting for the total of £313 million.
We are trying to be more accountable to the House so that the House will understand the situation more clearly. We are doing so so that we cannot drift into a situation where, because of a bunching of payments, which can happen because often the decision is in the hands of industrialists rather than the Department, we temporarily override the limits without the permission of the House of Commons. I hope that the Opposition will accept that this is a genuine problem and one that we have tried to accommodate with reasonable integrity towards the House.
A further point to bear in mind is that within the ceilings we have guarantees. In many cases the ceilings will never be called upon. That is why it is important to differentiate. The hon. Member for Bridgwater has said that the Bill marks the spending of £1,600 million. It does not. It is important that the House understands the distinction. I am sure that the hon. Gentleman understands it. What he said was probably a slip of the tongue. Nevertheless, I feel it is right to emphasise the point. We are talking about commitments, including commitments which may never arise. In a sense, we are underwriting agreements that may be entered into but which we may never be called upon to meet. Therefore, we are not talking in terms of £1,600 million under the Bill, but in order to enter into such undertakings we have to have sufficient flexibility in order to be able to offer industry that facility.
A further reason for the size of the increase is that we are hoping to get new industry schemes and more accelerated investment projects. As regards industry schemes, hon. Members will be fully aware that two such schemes were entered


into under the Conservative Government —namely, the Wool Textile Scheme and the Offshore Supply Scheme. It is worth repeating the point, made by my right hon. Friend the Secretary of State at the outset, that the offshore scheme was open-ended. That was not our doing, but it was open-ended.

Mr. Tom King: So what?

Mr. Williams: The hon. Gentleman says "So what?" The "So what?" is that it could conceivably reach up to £200 million.

Mr. Varley: We were given a blank cheque.

Mr. Williams: My right hon. Friend is correct: we are meeting the blank cheque that Conservative Members initially signed.
Opposition hon. Members have asked about the increase in the sums involved under the offshore scheme. The payments to date have been relatively small. They were less than £1 million by the end of last year. However, there are commitments for £45 million. Some of those commitments may be as much as eight years ahead. That is in the nature of the sort of industry with which we are dealing. The obligation is imposed upon the Government when the decisions are made by the industrialists covered by the scheme. It is for that reason that we think it may expand to a substantial scale. I hope that it will be realised that in setting our ceiling we are having to accommodate a possible £200 million rather than the £1 million that now stands against the scheme.

Mr. Tom King: The Minister is clearly trying to help the House by explaining the figures. He has now said that, in operating in what is obviously a prudent financial manner and taking total commitments into account, £313 million is now committed. I assume that that includes commitments under the Offshore Supply Scheme. I think that the Minister of State has said that the present money will last until the end of this financial year, virtually a year from now. If that is so, why has the Bill been brought forward now when the funds are not actually needed for a year?

Mr. Williams: I have already indicated that the commitments under the offshore scheme are open-ended and not completely in our control. We cannot be sure what scale it will attain. We have to make provisions in ample time if, therefore, it appears that we shall have to meet the ceiling by the end of this year. It is as well that the House should have ample opportunity to discuss the matter. The Opposition will have a greater chance to discuss our going to the ceiling of £600 million than if we had gone to the ceiling of £550 million, because in that event there would have been two limited Order debates, instead of which we now have this Second Reading debate, a Committee stage and all the subsequent stages, including the Bill going to another place. In terms of accountability, for the extra £50 million which is initially offered within the Bill we have given hon. Members massively greater powers to comment to the House of Commons.

Mr. Richard Wainwright: Surely, in making that claim the hon. Gentleman will bear in mind that the House has been given no details about the spending of the higher sum. At least under an Order we would have known those details.

Mr. Williams: I have assumed that hon. Members want me to answer the points that they have made before I conclude my speech. I am trying to answer them. I am trying to develop my points in a logical fashion. I am trying to explain to the House why certain things are happening. I want to make the matter clear point by point.
A further factor to bear in mind—it is foolish to treat this as something that can politically be swept under the carpet, ignored or turned into a political football by the Opposition—is that inflation has massively eroded the real ceiling of the existing legislation, because there was no provision in the initial legislation to ensure that the £550 million was in real terms. We must accept that in real terms world inflation—including our inflation—has eroded the real impact of the original legislation.
As regards controls, I have indicated that Orders will be necessary for each subsequent tranche. [Interruption.] It


may be two and a half times as big, but in real terms it still does not work out very much bigger in spending power than the original tranches. [Interruption.]That is not exactly a great secret. Surely Opposition Members are not pretending that inflation has come as a surprise to them.

Mr. Lawson: rose—

Mr. Williams: I shall develop my argument. I have given way often enough.

Mr. Lawson: rose—

Mr. Williams: I have entered into an undertaking with the Opposition to try to complete my speech within a limited time. That is what I am trying to do. At the same time I am trying to answer the debate. I hope that the hon. Member for Blaby (Mr. Lawson) will allow me to develop my speech in my own manner. Each subsequent tranche of money will have its own Order. There will be a Committee stage and consideration in another place for the new legislation which is coming forward—[Interruption.] I am not sure, Mr. Deputy Speaker, whether you are supposed to be in control of the proceedings of the House or whether that control is in the hands of the hon. Member for Blaby, who mutters from a sedentary position.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I have been noticing the sedentary observations being made by the hon. Member for Blaby (Mr. Lawson). I hope that the hon. Gentleman will try to contain himself.

Mr. Williams: I am grateful, Mr. Deputy Speaker. Normally I should not wish to embroil you in that way, but I believe that most of the House wants to know the answers and wants the debate to have a decision at a reasonable time.
The second control is the fact that £5 million of the ceiling remains. That is the amount that remains on individual schemes. The £5 million remains in real terms. That means that the House exercises tighter control over individual schemes than previously. The third control is the Industrial Development Advisory Board. The fourth control is that we have now published, unlike the Opposition when they were in Government, a meaningful set of criteria. Each individual project is monitored. We are

monitoring each project within the Department, and the appropriate division monitors the work. We have recruited specialists into the Department to help us in our work. They are specialists from industry.

Mr. Hal Miller: Will the results of the monitoring ever be made available to the House?

Mr. Williams: They will in the sense that they will be part of whatever the Minister's decisions are on further investments and further assistance for firms. It may be part of the explanatory information that we would probably give. However, as it is part of the normal administrative advice within the Department, obviously we would not be publishing the normal working papers of the Department.
The hon. Member for Bridgwater complained of a plethora of different schemes. That was his phrase. But it would be absurd to have an excessively rigid approach to industrial assistance. Therefore, flexibility is essential. Far from seeing it as a point of rebuke, I should have thought that flexibility was a commendation of the way in which Departments administer the legislation, because we are flexible both in the type of assistance and in the way in which each type is used to meet the needs of individual firms.
The hon. Member for Colne Valley (Mr. Wainwright) asked for evidence of the way in which we shall be using extra funds that are made available. I have indicated that there are further industrial schemes, sectoral schemes, to come forward. The Paper and Board Scheme is the immediate one, but there are several others under consideration. Under the Accelerated Projects Scheme, which is a cyclical rather than an employment-creating scheme, a further 95 applications are being processed, and this should generate about £330 million of investment; and another 50 possible applications are now being discussed, which could generate another £180 million or so of investment. This investment comes over a wide range of industry.
I believe that the Government have used the Section 8 powers imaginatively and effectively to bring forward investment, to increase investment and to create


and save jobs. It must be seen in conjunction with the Section 7 work, where 110,000 jobs have been created and 56,000 safeguarded since we came to office, and in conjunction with the largest ever advance factory building programme.
The economic context must also be borne in mind. The House has to remember that although we have been through the worst world recession for over 40 years and our industry has tremendous liquidity problems, it is essential that we catch the upturn in the economy. That is what we are aiming to do with the legislation—to ensure that the new investment is available at the appropriate time and that there is maximum flexibility in the aids, assistance and incentives that we can give to new footloose industry.
The hon. Member for Bridgwater said that he thought the Price Code was at the heart of many of our problems. I should remind him that it was his own party which introduced the Price Code, that we introduced the investment relief —something that the Conservatives did not do—and that the code is currently being reviewed.

Division No. 114.]
AYES
[7.45 p.m.


Abse, Leo
Coleman, Donald
Freeson, Reginald


Allaun, Frank
Concannon, J. D.
Garrett, John (Norwich S)


Anderson, Donald
Conlan, Bernard
George, Bruce


Archer, Peter
Cook, Robin F. (Edin C)
Gilbert, Dr John


Armstrong, Ernest
Corbett, Robin
Ginsburg, David


Ashley, Jack
Cox, Thomas (Tooting)
Golding, John


Ashton, Joe
Craigen, J. M. (Maryhill)
Gould, Bryan


Atkins, Ronald (Preston N)
Crawshaw, Richard
Gourlay, Harry


Atkinson, Norman
Crosland, Rt Hon Anthony
Graham, Ted


Bagier, Gordon A. T.
Cryer, Bob
Grant, George (Morpeth)


Barnett, Guy (Greenwich)
Cunningham, G. (Islington S)
Grocott, Bruce


Barnett, Rt Hon Joel (Heywood)
Cunningham, Dr J. (Whiteh)
Hamilton, W. W. (Central Fife)


Bates, Alf
Davidson, Arthur
Hardy, Peter


Bean, R. E.
Davies, Bryan (Enfield N)
Harrison, Walter (Wakefield)


Benn, Rt Hn Anthony Wedgwood
Davies, Denzil (Llanelli)
Hatton, Frank


Bennett, Andrew (Stockport N)
Davies, Ifor (Gower)
Hayman, Mrs Helene


Bidwell, Sydney
Davis, Clinton (Hackney, C)
Heffer, Eric S.


Bishop, E. S.
Deakins, Eric
Hooley, Frank


Blenkinsop, Arthur
Dean, Joseph (Leeds W)
Horam, John


Booth, Rt Hon Albert
Dempsey, James
Howell, Rt Hon Denis


Boyden, James (Bish Auck)
Doig, peter
Hoyle, Doug (Nelson)


Bradley, Tom
Dormand, J. D.
Huckfield, Les


Bray, Dr Jeremy
Duffy, A. E. P.
Hughes, Rt Hon C. (Anglesey)


Brown, Hugh D. (Provan)
Dunnett, Jack
Hughes, Robert (Aberdeen N)


Brown, Robert C. (Newcastle W)
Edge, Geoff
Hughes, Roy (Newport)


Buchan, Norman
Ellis, John (Brigg &amp; Scun)
Hunter, Adam


Buchanan, Richard
Ennals, David
Irvine, Rt Hon Sir A. (Edge Hill)


Butler, Mrs Joyce(Wood Green)
Evans, Fred (Caerphilly)
Irving, Rt Hon S. (Dartford)


Callaghan, Rt Hon J. (Cardiff SE)
Evans, loan (Aberdare)
Jackson, Miss Margaret (Lincoln)


Callaghan, Jim (Middleton &amp; P)
Evans, John (Newton)
Janner, Greville


Campbell, Ian
Ewing, Harry (Stirling)
Jay, Rt Hon Douglas


Canavan, Dennis
Faulds, Andrew
Jeger, Mrs Lena


Cant, R. B.
Fernyhough, Rt Hon E.
Jenkins, Hugh (Putney)


Carmichael, Neil
Flannery, Martin
Jenkins, Rt Hon Roy (Stechford)


Carter, Ray
Fletcher, Ted (Darlington)
John, Brynmor


Carter-Jones, Lewis
Foot, Rt Hon Michael
Johnson, James (Hull west)


Cartwright, John
Ford, Ben
Jones, Alec (Rhondda)


Castle, Rt Hon Barbara
Forrester, John
Jones, Barry (East Flint)


Clemitson, Ivor
Fowler, Gerald (The Wrekin)
Jones, Dan (Burnley)


Cocks, Michael (Bristol S)
Fraser, John (Lambeth, N'w'd)
Judd, Frank

The Opposition are in no position to lecture the Government on investment. When the Conservatives came to office they destroyed the existing investment incentive system. The regions suffered. Industrial development certificates in many regions fell to one-third of their previous levels. While the damage was done in the early days of a previous Government—within the first month, actually —and confidence was destroyed, by the time they left office investment in real terms had never returned to the level at which it was when they came to office.

It is incredible that the hon. Member for Surrey, North-West could stand at the Box knowing that after three and a half years under his Government's administration investment was lower than it had been when they came to office and boast that they had spent only £10 million under their own Industry Act. In other words, it was being used as a sham. We intend of use it as a proper job-creating and investment-inducing measure.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 259, Noes 244.

Kaufman, Gerald
Morris, Rt Hon J. (Aberavon)
Stallard, A. W.


Kelley, Richard
Moyle, Roland
Stewart, Donald (Western Isles)


Kerr, Russell
Mulley, Rt Hon Frederick
Stoddart, David


Kilroy-Silk, Robert
Murray, Rt Hon Ronald King
Stott, Roger


Kinnock Neil
Newens, Stanley
Strang, Gavin


Lambie, David
Oakes, Gordon
Strauss, Rt Hon G. R.


Lamborn, Harry
Ogden, Eric
Summersklll, Hon Dr Shirley


Lamond, James
O'Halloran, Michael
Swain, Thomas


Latham, Arthur (Paddington)
Orbach, Maurice
Taylor, Mrs Ann (Bolton W)


Leadbitter, Ted
Ovenden, John
Thomas, Ron (Bristol NW)


Lee, John
Owen, Dr David
Thorne, Stan (Preston South)


Lestor, Miss Joan (Eton &amp; Slough)
Padley, Walter
Tierney, Sydney


Lever, Rt Hon Harold
Palmer, Arthur
Tinn, James


Lewis, Ron (Carlisle)
Park, George
Tomlinson, John


Litterick, Tom
Parker, John
Tomney, Frank


Loyden, Eddie
Parry, Robert
Torney, Tom


Luard, Evan
Pavitt, Laurie
Tuck, Raphael


Lyon, Alexander (York)
Pendry, Tom
Urwin, T. W.


Lyons, Edward (Bradford W)
Perry, Ernest
Varley, Rt Hon Eric G.


Mabon, Dr J. Dickson
Phipps, Dr Colin
Wainwright, Edwin (Dearne V)


McCartney, Hugh
Price, C. (Lewisham W)
Walden, Brian (B'ham, L'dyw'd)


MacCormick, Iain
Price, William (Rugby)
Walker, Harold (Doncaster)


McElhone, Frank
Radice, Giles
Walker, Terry (Kingswood)


MacFarquhar, Roderick
Richardson, Miss Jo
Ward, Michael


McGuire, Michael (Ince)
Roberts, Gwilym (Cannock)
Watkins, David


Mackenzie, Gregor
Robinson, Geoffrey
Walkinson, John


Mackintosh. John P.
Roderick, Caerwyn
Weetch, Ken


Maclennan, Robert
Rodgers, George (Chorley)
Weitzman, David


McMillan, Tom (Glasgow C)
Rodgers, William (Stockton)
Wellbeloved, James


McNamara, Kevin
Rooker, J. W.
White, Frank R. (Bury)


Madden, Max
Rose, Paul B.
White, James (Pollok)


Magee, Bryan
Ross, Rt Hon W. (Kilmarnock)
Whitehead, Phillip


Mahon, Simon
Rowlands, Ted
Whitlock, William


Mallalieu, J. P. W.
Sandelson, Neville
Willey, Rt Hon Frederick


Marks, Kenneth
Sedgemore, Brian
Williams, Alan (Swansea W)


Marquand, David
Shaw, Arnold (Ilford South)
Williams, Alan Lee (Hornch'ch)


Marshall, Dr Edmund (Goole)
Sheldon, Robert (Ashton-u-Lyne)
Williams, Rt Hon Shirley (Hertford)


Marshall, Jim (Leicester S)
Short, Rt Hon E. (Newcastle C)
Wilson, Gordon (Dundee E)


Mason, Rt Hon Roy
Short, Mrs Renée (Wolv NE)
Wilson, William (Coventry SE)


Maynard, Miss Joan
Silkin, Rt Hon John (Deptford)
Wise, Mrs Audrey


Meacher, Michael
Silkin, Rt Hon S. C. (Dulwich)
Woodall, Alec


Mendelson, John
Silverman, Julius
Woof, Robert


Mikardo, Ian
Skinner, Dennis
Wrigglesworth, Ian


Millan, Bruce
Small, William
Young, David (Bolton E)


Miller, Dr M. S. (E Kilbride)
Smith, John (N Lanarkshire)



Miller, Mrs Millie (Ilford N)
Snape, Peter
TELLERS FOR THE AYES:


Molloy, William
Spearing, Nigel
Mr. Joseph Harper and


Morris, Charles R. (Openshaw)
Spriggs, Leslie
Mr. James Hamilton




NOES


Adley, Robert
Channon, Paul
Fox, Marcus


Aitken, Jonathan
Churchill, W. S.
Fraser, Rt Hon H. (Stafford &amp; St)


Alison, Michael
Clark, Alan (Plymouth, Sutton)
Freud, Clement


Amery, Rt Hon Julian
Clark, William(Croydon S)
Fry, Peter


>Arnold, Tom
Clarke, Kenneth (Rushcliffe)
Galbraith, Hon T. G. D.


Atkins, Rt Hon H. (Spelthorne)
Clegg, Walter
Gardiner, George (Re[...]gate)


Awdry, Daniel
Cockcroft, John
Gardner, Edward (S Fylde)


Baker, Kenneth
Cooke, Robert (Bristol W)
Gilmour, Rt Hon Ian (Chesham)


Banks, Robert
Cope, John
Glyn, Dr Alan


Bell, Ronald
Cordle, John H.
Godber, Rt Hon Joseph


Bennett, Sir Frederic (Torbay)
Cormack, Patrick
Goodhart, Philip


Bennett, Dr Reginald (Fareham)
Costain, A. P.
Goodhew, Victor


Benyon, W.
Critchley, Julian
Goodlad, Alastair


Berry, Hon Anthony
Crouch, David
Gorst, John


Biffen, John
Crowder, F. P.
Gow, Ian (Eastbourne)


Biggs-Davison, John
Davies, Rt Hon J. (Knutsford)
Gower, Sir Raymond (Barry)


Blaker, Peter
Dean, Paul (N Somerset)
Grant, Anthony (Harrow C)


Boscawen, Hon Robert
Dodsworth, Geoffrey
Gray, Hamish


Bottomley, Peter
Douglas-Hamilton, Lord James
Griffiths, Eldon


Bowden, A. (Brighton, Kemptown)
Drayson, Burnaby
Grimond, Rt Hon J.


Boyson, Dr Rhodes (Brent)
du Cann, Rt Hon Edward
Grist, Ian


Braine, Sir Bernard
Durant, Tony
Grylls, Michael


Brittan, Leon
Eden, Rt Hon Sir John
Hall, Sir John


Brocklebank-Fowler, C.
Edwards, Nicholas (Pembroke)
Hall-Davis, A. G. F.


Brotherton, Michael
Elliott, Sir William
Hamilton, Michael (Salisbury)


Brown, Sir Edward (Bath)
Emery, Peter
Hampson, Dr Keith


Bryan, Sir Paul
Eyre, Reginald
Hannam, John


Buchanan-Smith, Alick
Fairbairn, Nicholas
Harrison, Col Sir Harwood (Eye)


Buck, Anthony
Fairgrieve, Russell
Harvie Anderson, Rt Hon Miss


Budgen, Nick
Finsberg, Geoffrey
Hastings, Stephen


Bulmer, Esmond
Fisher, Sir Nigel
Havers, Sir Michael


Burden, F. A.
Fletcher-Cooke, Charles
Hayhoe, Barney


Butler, Adam (Bosworth)
Fookes, Miss Janet
Heath, Rt Hon Edward


Carlisle, Mark
Forman, Nigel
Heseltine, Michael


Chalker, Mrs Lynda
Fowler, Norman (Sutton C'f'd)
Hicks, Robert







Higgins, Terence L.
Meyer, Sir Anthony
Shepherd, Colln


Holland, Philip
Milier, Hal (Bromsgrove)
Shersby, Michael


Hooson, Emlyn
Miscampbell, Norman
Sllvester, Fred


Hordern, Peter
Mitchell, David (Basingstoke)
Sims, Roger


Howe, Rt Hon Sir Geoffrey
Moate, Roger
Sinclair, Sir George


Howell, David (Guildford)
Monro, Hector
Skeet, T. H. H.


Hunt, David (Wirral)
Montgomery, Fergus
Smith, Dudley (Warwick)


Hunt, John
Moore, John (Croydon C)
Speed, Keith


Hut[...]hison, Michael Clark
More, Jasper (Ludlow)
Spence, John


James, David
Morgan-Giles, Rear-Admiral
Spicer, Jim (W Dorset)


Jenkin, Rt Hn P. (Wanst'd &amp; W'df'd)
Morris, Michael (Northampton S)
Spicer, Michael (S Worcester)


Johnson Smith, G. (E Grinstead)
Morrison, Charles (Devizes)
Stainton, Keith


Jones, Arthur (Daventry)
Morrison, Hon Peter (Chester)
Stanbrook, Ivor


Jopling, Michael
Neave, Airey
Stanley, John


Joseph, Rt Hon Sir Keith
Nelson, Anthony
Steen, Anthony (Wavertree)


Kellett-Bowman, Mrs Elaine
Neubert, Michael
Stewart, Ian (Hitchin)


Kimball, Marcus
Newton, Tony
Stokes, John


King, Tom (Bridgwater)
Nott, John
Tapsell, Peter


Knight, Mrs Jill
Oppenheim, Mrs Sally
Taylor, R. (Croydon NW)


Knox, David
Page, Rt Hon R. Graham (Crosby)
Taylor, Teddy (Cathcart)


Lamont, Norman
Pattle, Geoffrey
Tebbit, Norman


Lane, David
Percival, Ian
Temple-Morris, Peter


Langford-Holt, Sir John
Peyton, Rt Hon John
Thatcher, Rt Hon Margaret


Latham, Michael (Melton)
Pink, R. Bonner
Thomas, Rt Hon P. (Hendon S)


Lawrence, Ivan
Powell, Rt Hon J. Enoch
Townsend, Cyril D.


Lawson, Nigel
Price, David (Eastleigh)
Trotter, Neville


Lester, Jim (Beeston)
Pym, Rt Hon Francis
Tugendhat, Christopher


Lewis, Kenneth (Rutland)
Raison, Timothy
van Straubenzee, W. R.


Lloyd, Ian
Rathbone, Tim
Vaughan, Dr Gerard


Loveridge, John
Rawlinson, Rt Hon Sir Peter
Viggers, Peter


Luce, Richard
Rees, Peter (Dover &amp; Deal)
Wainwright, Richard (Colne V)


McAdden, Sir Stephen
Rees-Davies, W. R.
Wakeham, John


McCrindle, Robert
Renton, Rt Hon Sir D. (Hunts)
Walder, David (Clitheroe)


Macfarlane, Neil
Renton, Tim (Mid-Sussex)
Walters, Dennis


MacGregor, John
Ridley, Hon Nicholas
Warren, Kenneth


Macmillan, Rt Hon M. (Farnham)
Ridsdale, Julian
Weatherill, Bernard


McNair-Wilson, M. (Newbury)
Rifkind, Malcolm
Wells, John


McNair-Wilson, P. (New Forest)
Rippon, Rt Hon Geoffrey
Whitelaw, Rt Hon William


Madel, David
Roberts, Michael (Cardiff NW)
Wiggin, Jerry


Marshall, Michael (Arundel)
Roberts, Wyn (Conway)
Winterton, Nicholas


Marten, Neil
Ross, Stephen (Isle of Wight)
Wood, Rt Hon Richard


Mates, Michael
Rossi, Hugh (Hornsey)
Young, Sir G. (Ealing, Acton)


Mather, Carol
Rost, Peter (SE Derbyshire)
Younger, Hon George


Maude, Angus
Royle, Sir Anthony



Maudling, Rt Hon Reginald
Sainsbury, Tim
TELLERS FOR THE NOES:


Mawby, Ray
St. John-Stevas, Norman
Mr. Spencer Le Marchant


Maxwell-Hyslop, Robin
Scott, Nicholas
Mr. John Corrie.


Mayhew, Patrick
Shaw, Giles (Pudsey)

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Stoddart.]

Committee tomorrow.

Orders of the Day — INDUSTRY (AMENDMENT) [MONEY]:

Queen's Recommenation having been signified—

Resolved,

That it is expedient to authorise all such increased payments—

(a) out of money provided by Parliament, and
(b) into the Consodilated Fund,

as may result from any Act of the present Session increasing from £150 million to £600 million and from £100 million to £250 million the sums specified in section 8(7) of the Industry Act 1972 as, respectively, the limit on the Secretary of State's financial assistance to industry likely to benefit the economy and the maximum amount of each of the four possible increases of that limit.—[Mr. Stoddart. ]

Orders of the Day — PARLIAMENTARY AND OTHER PENSIONS AND SALARIES BILL

Order for Second Reading read.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr Speaker has selected the amendment for debate.

7.57 p.m.

The Minister of State, Civil Service Department (Mr. Charles R. Morris): I beg to move, That the Bill be now read a Second time.
With the permission of the House, I shall answer at the end of our discussions any questions asked during the debate. As hon. Members will recall, last summer the House decided that the appropriate salary for Members of Parliament was £8,000 per annum, as recommended by the Top Salaries Review Body. How-ever, in view of the serious economic situation at the time it was felt right that a substantial part of that salary


should be withheld and that the sum paid should be restricted to £5,750 per annum. That was the decision of the House last July and I am sure that it was the right decision.
The House also resolved that those who retired whilst this self-imposed restriction was in force should not be permanently penalised and that pensions should be calculated on the full rate for the job—£8,000. The main purpose of the Bill is to give effect to that decision. This is done by Clause 1.

Mr. George Cunningham: Will my hon. Friend tell the House why—with great personal respect to him—this measure is being presented to the House by the Minister of State, Civil Service Department? I should have thought that it would be normal, in a matter of this kind—a very House of Commons matter —for the Bill to be presented by the Leader of the House. Will my hon. Friend tell us why that is not being done?

Mr. Morris: I appreciate my hon. Friend's point, but this legislation falls within my responsibility, and I shall be taking the measure in Committee.

Mr. George Cunningham: It should be noted that there is at least one hon. Member—and I should have thought rather more—who thinks that this is not the right way in which the matter should be handled before the House.

Mr. Morris: I shall convey my hon. Friend's views to my right hon. Friend the Lord President and Leader of the House.
Clauses 2 and 5 make similar machinery provisions in respect of Ministers and other office holders. It is the normal superannuation practice to amend the rules of a pension scheme to cover all participants at the same time, and there could be no good reason to have different provisions for Ministers and office holders.
I must emphasise that these clauses do no more than to equip the scheme to cope with the situation that might arise in the future. In no sense do they prefigure decisions that the Government may take on future recommendations of the Top Salaries Review Body. Moreover, before they can be given effect, prior

approval by way of parliamentary resolution is necessary.
Clauses 3 and 4 make minor amendments to the existing pensions legislation, the latter remedying a number of technical defects.
In moving the last resolutions to increase the salaries of the Comptroller and Auditor General and the Parliamentary Commissioner for Administration in March last year, I intimated that the Government would introduce legislation to alter the machinery for varying their salaries. The pay of the Comptroller and Auditor General has been linked to that of the Permanent Secretaries for more than 100 years, and that of the Parliamentary Commissioner for Administration has been similiarly linked since the creation of that office.
Clause 6 does no more than make a change in the machinery for passing on changes in Permanent Secretary pay and provisions parallel to that for Members of Parliament on pensions. The House will retain control over the salaries of these two officers, since it will be open to it to vary the linkage by parliamentary resolution.

Mr. Ian Gow: Will the hon. Gentleman remind the House what salaries are payable at present to the two office holders to whom reference is made in. Clause 6?

Mr. Morris: I am grateful to the hon. Gentleman for asking that question. The information is not immediately to hand, but I shall cover the point when I reply to the debate.
Clause 7 makes similar provision for the Health Service Commissioners, although there are no separate Health Service Commisioners as yet.
I commend the Bill to the House and ask the House to give it a Second Reading.

8.4 p.m.

Mr. Paul Dean: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
this House declines to give a Second Reading to a Bill which, by basing pension rights on notional rather than actual pay, provides privileged arrangements for Members, Ministers and other office holders which are denied to the rest of the community.


I am obliged to the Chair for selecting this reasoned amendment.
It can be strongly argued, and I believe that it will be argued in all parts of the House, that the pay, pensions, conditions and facilities of Members of Parliament and office holders are poor in relation to our work load and responsibilities, and in comparison with other jobs. If the labourer is worthy of his hire, the parliamentary labourer should also be worthy of his hire.
But there is another princple which should be paramount—that we should not give ourselves privileges which the Government are denying others; that if the Government are dishing out medicine, Ministers should take it themselves, and MPs cannot escape. The Government are dishing out medicine on pension rights and other fringe benefits in their current pay policy and in the Finance Bill.
This Bill exempts MPs, Ministers and other office holders from the medicine. That is the essence of my case against it. The Government are creating privileges for us at the very moment when they are denying them to others.

Mr. Eric Ogden: Does the hon. Gentleman also agree that part of our difficulties at this stage arises from the fact that when Parliament agreed, almost 12 months ago, on the level of salary that we should receive now, the Government advised the House, and the House agreed, to take less than the tonic then available to people outside? Therefore, part of our difficulties arise not from taking privileges to which other people are not entitled but from accepting restrictions on our own salaries and increments which no one outside accepts.

Mr. Dean: Perhaps the hon. Gentleman will allow me to develop my argument. I shall deal with that matter.
Part of the essence of my case is that other sections of the community are equally restricted in pay, and in pension rights that follow from that. It is on that basis that I suggest that we are giving ourselves particular privileges.
In a leading article on 23rd April, headed
Making His Own Pips Squeak",

The Times made the following point:
It is an essential principle of taxation policy that those who impose taxes should bear their full weight. It is obviously intolerable if ordinary members of the public have to pay taxes which Members of Parliament or members of the Government are excused. If taxes are too heavy or too unfair for the Cabinet, they are too heavy and unfair for everyone else.
That quotation was in the context of the Finance Bill and the proposed taxation of certain benefits, including cars and accommodation. We have yet to see whether Ministers will take their own medicine on cars and accommodation.
I realise, Mr. Deputy Speaker, that you would not wish me to pursue that point now, but the principle enunciated in that leader applies equally to other fringe benefits, including pensions. Should the medicine be taken by all, or is it an unnecessary and harmful medicine for all?
I do not believe that restrictions on pension rights should form part of a pay policy. A number of us argued in that way when the pay policy was introduced last year.
Pension schemes are anti-inflationary and are an ally rather than an enemy of pay policy. When we examine the effect on individuals, we see that when pensions are based on final pay and when that pay is either frozen or restricted, people who retire during the period of those restrictions can pay the penalty for the rest of their lives. There is a strong argument for saying that those penalties should not be inflicated as part of pay policy.
This matter was debated briefly on the Remuneration, Charges and Grants Bill in July last year. A number of us argued on that occasion that it should be no part of pay restrictions to restrict pensions as well. We managed to persuade the Government to make a few limited exceptions, but they were limited. If the Government are prepared to remove restrictions on the development of pension schemes, stage 2 may be acceptable. If the Government stop nitpicking on fringe benefits in the provisions of the Finance Bill, this Bill will look somewhat different. But we must judge this Bill on the situation that now exists.
I thought that in presenting the Bill the Minister of State, Civil Service Department would rely on the argument that what is now being done has a respectable precedent in the Civil Service. But he did not rely on that argument. Had he done so, I would have been doubtful whether that argument could have been substantiated on the basis of the Bill.
However, that is not the kernel of the case that I am putting. If we are to take the analogy of the public service, we must remember that many people, rightly or wrongly, feel that the public service is now in a privileged position in terms of pay restrictions. It is felt that members of the public service are in a privileged position in terms of their pay and the basis on which their pensions are calculated, compared with those who are not in the public service. That is a fairly widely held view.
In these days of rapid inflation, criticisms are also heard that inflation-proofing of public service pensions, which last year involved an increase of about 26 per cent., is the kind of increase that no private scheme can manage. I shall not enter into the merits of the argument, because it is not essential to my point, but in so far as criticism exists, and I believe that it is widespread, it would be unwise to add fuel to the fire by putting Ministers and Members of Parliament in the same position.
My main argument involves a comparison with the private sector during stage I of the pay policy. The original intention of the Government, when introducing the pay policy, was to have a virtual freezing of pension rights. Modifications were made as a result of our debate last July. I give the Government credit for recognising the points put from both sides of the House to the effect that if pensions were frozen considerable hardship would result, particularly for those who retired during the period of the pay policy.
One modification made during the passage of that Bill sought to deal with this hardship. I should like to quote what was said by the former Secretary of State for Employment, who is now Leader of the House. He said:

It will also be open to those concerned to decide, if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July, even though that commitment may be limited by the new policy."—[Official Report, 23rd July 1975; Vol. 896, c. 688.]
That statement by the then Secretary of State for Employment was in due course embodied in detailed rules that emanated from the Joint Office of the Superannuation and Occupational Pension Boards. In Memorandum No. 28, which the boards issued in January 1976, they said:
Where an employee retires and the calculation of 'final remuneration' depends in whole or in part on remuneration which has been restricted, so as to conform with the policy "—
that refers to the pay policy—
below that to which there was a commitment in existence before 11th July 1975, then the calculation may be based on the actual remuneration received in the relevant period plus such further amount as the employer would have received had there been no such restriction.
They then go on to define the meaning of "commitment ":
 "The word ' commitment' means an agreement made before 11th July 1975 which, apart from the pay policy, would have bound the employer to increase the employee's remuneration to an extent which would have breached the limits imposed by the policy.
It is clear from the combination of the statement made by the Secretary of State in this House and the memorandum that I have just quoted that the concession made was specific and was available only for commitment entered into before 11th July 1975, which was the date of publication of the White Paper foreshadowing the pay restrictions. That is the significance of the date of 11th July.
The Boyle recommendations are not on all fours with a pay agreement, but I suggest that they are very similar. The significance of the Boyle proposals in this context is that they were not published until after 11th July 1973. They were published on 16th July last year and eventually were agreed by the House in a modified form on 22nd July of that year.
Therefore, we have before us an arrangement that is similar to a commitment to pay in the private sector and outside the clear time limits laid down by the former Secretary of State. We are


providing for ourselves privileged pension arrangements that the Government have specifically denied to the private sector under the pay policy.

Mr. George Cunningham: The hon. Gentleman said that the date of publication of the Boyle Report came considerably after the date of presentation. He must appreciate that some part of that time was occupied by the Government making up their minds on what they wanted to commend to the House to do about the report, and that some part of the time was taken up in printing. Is he suggesting that the appropriate date is the publication of the report rather than the date of the making or signing of the report?

Mr. Dean: I am suggesting to the House that exactly the same criteria should apply in the case of Boyle as applied in the case of the Government White Paper. The publication date of the Government White Paper was, as I mentioned, 11th July. They passed all the concessions that are allowable from the publication date of the White Paper. I therefore suggest to the hon. Gentleman that it is an entirely fair and reasonable analogy that any concessions there should be for our pensions should be based also on the date of the publication of the similar paper, namely, the Boyle Report. I am saying to the hon. Gentleman that that was a date after the date from which the concessions apply.
I have no pleasure in making this case, and I do not expect enthusiastic "Hear, hears" from colleagues who would value improved pension arrangements as much as I would. It is the Government who are putting the House in this false position. The remedy is in the Government's own hands. Let them take back the spiteful clauses on fringe benefits in the Finance Bill. Let them remove the restrictions on the improvement of pension arrangements in stage 2 of the pay policy. They can then commend the Bill to the House with a good conscience.

8.21 p.m.

Mr. George Cunningham: I can be very brief on this subject because I think that the nub of the matter is contained in one or two technical points. The merits of the

major question of the remuneration and other conditions applying to Members of Parliament were gone over with the most unsatisfactory result last July. All I want to say about that is that it is high time that this House had enough gumption and dignity to provide properly for itself, in accordance with the duties involved in being a Member of the House. It is time that Members stopped competing with each other with regard to how little we are prepared to pay ourselves for the services we give here.
The hon. Member for Somerset, North (Mr. Dean) referred to inflation-proofing in the public service and contrasted it with the arrangements normally applying with respect to inflation-proofing in private pension schemes. The public service has taken a great deal of stick recently on this point, I think totally unfairly.
If we were devising a good pension scheme, whether for public servants or anyone else, that scheme, I suggest, should provide for inflation-proofing as total as possible from the moment of retirement. There ought in the long term to be no difficulty about doing that. We simply have to trade off inflation-proofing against the level of pension available at the point of retirement. If we want inflation-proofing, we have to settle for a lower rate of pension at the point of retirement in order to pay for it.
I should like to see private schemes going more for inflation-proofing after retirement. They certainly cannot do it at a time when they are not able to get for their funds a return from the market which is anything like equal to the current level of inflation, but in normal times—and taking it not year with year but decade with decade—they ought to be able to achieve that. Rather than giving public servants stick and the Government stick for the arrangements applied to public servants, we should be telling the private pension industry that it ought also to be working in that direction.
The hon. Gentleman has suggested that the two dates we should fix in our minds, with regard to the technicalities he quite rightly raised, are the date of publication of the Boyle Report and the date of publication of the pay policy White Paper. Even taking his own presentation of the case, what he was suggesting was that an agreement reached before the


date of publication of the White Paper should be satisfactory for this purpose. He did not suggest—and the words he read out did not suggest—that that agreement needed to be published before the date of publication of the White Paper.
What would be the situation in the case of an agreement which had been reached on 1st July last year and which had then, in accordance with some normal procedure, fallen to be printed and published but which was not printed and published until 12th July last year? I suggest that, in accordance with the principles the hon. Gentleman read out, that agreement would have fallen on the favourable side of the line because it was an agreement reached before 11th July.
The hon. Gentleman is inviting us to regard the production of the Boyle Report as being equivalent for this purpose to the reaching of an agreement, and I think that is fair. The question is whether we then pay attention to the date when the Boyle Report was signed, which as certainly before 11th July last year, or to the date when it was published. The date when it was published is a very arbitrary thing, depending upon whether the printers are able to do it in time and on how long the Government shilly-shally before doing the wrong thing. It has no natural existence at all. The only natural thing in that scene is the time at which the report was signed. I do not have handy a copy of the report, but perhaps the hon. Gentleman can tell us when that report was, as it were, promulgated to the Government by Lord Boyle and the others.
In passing, I point out that it is high time the House stopped these reports being promulgated to the Government at all. They have nothing to do with the Government. The Government should be clean out of it. It is the business of the House to determine these things. The Boyle Report and other such reports should be made to the House. Only a decadent old establishment such as this would tolerate such reports being made to the Government and the Government's Minister for the Civil Service taking a leading part in putting the matter before the House.

Mr. Paul Dean: Following the arguments about publication dates, and recognising that they can be somewhat arti-

ficial in that a great deal of negotiation has gone on beforehand, surely we have to take some date. The Government took the date of publication of the White Paper on which to base the concessions. Is it not reasonable, therefore, if that date was taken, however artificial it may have been, that a similar date should be taken for the Boyle Report in order to get a fair comparison?

Mr. Cunningham: My immediate answer is "No". If I may try to say why I think it is "No", my answer would be something like this. Frequently, when the Government are announcing changes of policy, those changes of policy are made effective from the time when the intention to implement them is announced. Thus, if we declare that we should have a wealth tax, we frequently provide that it will be effective from the time when the intention is declared—subject, of course, to Parliament subsequently passing the legislation.
That has a very commonsense purpose to it, namely, to prevent people from escaping the obligation which later will retrospectively be laid upon them because they know that it is to be laid upon them. I suggest that that is the justification for the Government taking the date of publication of the White Paper–11th July—as the date before which an agreement needed to be reached.
I suggest, however, that the proper comparison with the date for the Boyle Report is the date of the making of the Boyle Report, which is equivalent to the date of the reaching of an agreement. If the hon. Gentlemen were saying that the comparison really should be with the date on which the House passed the motions I could see more logic in it, and that would meet his case as well as the argument that he has chosen to adopt. If, however, he bases himself upon the making of the Boyle Report, the more natural date to take is the date when it was made and not the purely artificial date when it was published.

Mr. Paul Dean: Will the hon. Gentleman, therefore, address his remarks to the date on which the House passed the Resolution in modified form, which was 29th July, after the date from which the concessions provided under the pay policy were operated?

Mr. Cunningham: It was not 29th July.It was 23rd July, in the early morning—

Mr. Paul Dean: After 11th July.

Mr. Cunningham: I know. But the hon. Gentleman has made his case. When one knocks down his case, he cannot say "You are right. Now I raise another case. Please try to knock that one down." I have suggested to him that it is better than the case which he put forward. He made the best case he could, and I think that so far I have made a better case against it.
I only say, because the hon. Gentleman makes it necessary for me to make some comment on the point, that one could take either the date when the House reached its decision in the matter or the date of the making of the Boyle Report. In the past, until the disgraceful precedent of last year, it has been the practice for the House to accept the recommendations of the Boyle Committee or its predecessor Committees. Therefore, it is perfectly respectable to adopt the date of the making of the report as the one which is to be compared with the making of an agreement for that purpose. Others may choose different dates, but in my view that date is not clearly wicked and unacceptable.
Finally, there are tax concessions wall regard to contributions made by employees or quasi-employees like us for the purposes of superannuation. The question might arise whether, by basing our pension scheme on a notional salary of £8,000 and securing that the contributions into the fund will be at the rate of 5 per cent. of that and not 5 per cent. only on £5,750, we are exceeding any normal figure of contributions by employees which would attract tax relief. I have only one arithmetical point to make, and it is that 5 per cent. of £8,000 is equal to just under 7 per cent. of £5,750, and a contribution of 7 per cent. on the part of the employee in any employer-employee joint contribution is not unusual or excessive and is not above the limit for attracting tax relief.
On both points, therefore, I suggest that the hon. Member for Somerset, North has failed to make his case and that the House should allow the Bill to have its Second Reading.

8.33 p.m.

Mr. A. G. F. Hall-Davis: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) opened his interesting comments by saying that the matter boiled down to a few technical points. I cannot accept that. If I may deal with his argument, I do not think that the Government would go along with what he said on his technical points. If the Government had accepted his view, they would not have introduced this Bill—

Mr. George Cunningham: Why not?

Hall-Davis: I shall come to that.
This discussion is on the point of privilege arising from a Bill that applies specifically and solely to Members of this House. That is the point of principle to which I wish to address myself, because I believe that by that type of legislation the Government have introduced an ill-judged and insensitive Bill.
We cannot consider our position in this House in a vacuum. We cannot think of our own reputation totally apart from the circumstances being experienced by the electorate outside this House. As my hon. Friend the Member for Somerset, North (Mr. Dean) has already said, whether we like it or not we already belong to a select band, because we have inflation-proof pensions. I know this was introduced by a Government, which I was supporting, for civil servants and public servants for the very best of motives. It was done largely for reasons of which the hon. Member for Islington, South and Finsbury would approve—to give incentive and encouragement to private sector occupational schemes to do the same. It has, in fact, been turned by events into the most valuable of all conditions of employment.
We must remember that many people have seen the value of their occupational pension schemes halved since their retirement date. Many of them have seen it halved in the last six years. It is a fact —and although it is not the main point I am making it is one that we should not ignore—that even those employers with the best of records in the provision and maintenance of occupational pension schemes—those who in former years have regularly adjusted the pensions of those who have retired to keep in line with


the cost of living—have, in the last two years, found it quite impossible to keep pace, in conditions of recession and falling profits, with the unprecedented inflation that we have experienced. This emphasises the special band who enjoy this very favourable condition of service.
There are many people, whom, again, we should not disregard in our discussions, who were debarred by technicalities from an improvement in their pension. Many people who, in the course of their career, had every reason to expect a salary or pay increase—quite a substantial one after the chosen date—have not received it. We are not the only people in that category. When the Government ask the House to improve a level of pension related to a notional salary that has never been paid we must remember that we are not the only ones who have suffered a disappointment in relation to our legitimate expectations. There are many people who have every bit as good a reason as us to expect an increase in salary, and I, personally, would not like to see us sheltering behind a technicality —certainly not by a privileged Bill of this kind.
Before I am thought to be too sententious, let me point out that I am on record as having said, in the unhappy debate which we had, that I thought the right figure for our salaries was £6,300 —the figure we would normally have expected in line with the various pay policies and the social contract up to that date. As my hon. Friend said, under the pay pause many people have been denied improvements in the terms of their pension schemes, and this is something of which he should not be insensitive.
I was told by the Minister of State at that time that there was a precedent—it has been referred to again today—and that this type of action had been taken in the past for civil servants. But there is one difference, which is of decisive importance, namely, that we are, in effect, our own employers. We have the power to fix our own salaries and our own terms and conditions of employment. Therefore, we have a special and strong obligation to do nothing that might be held offensive or objectionable by those who do not enjoy this control over their own remuneration.
I find the Bill objectionable, regardless of the background—regardless of what went on in June or July last year. No one can make more derogatory remarks about the Boyle Committee than I. Any competent trade union official or personnel director could have come to that conclusion in three weeks from 1st January, not seven months. It is not that I lack a feeling of frustration at what has happened, but I find the Bill objectionable because, regardless of the background, it places Members of Parliament in a position of privilege through legislation the benefits of which do not extend to members of the generality of occupational pensions schemes. That is my objection.
Some hon. Members may not go along with my next remark, but to compound the Government's misjudgment, this special legislation is unnecessary. The fact that the Government have chosen this course is as much an indication of the cavalier attitude that they have adopted to the feelings of the general public and the reputation of this House as the fact that the Leader of the House did not feel that this subject warranted his attendance tonight.
I suggest—I hope that I am correct—that it would be possible to amend the rules of the parliamentary pension fund to allow us to introduce what the Revenue memoranda, from one of which my hon. Friend the Member for Somerset, North quoted, describe as "dynamised final remuneration". That would be a particularly appropriate way of dealing with pensions of hon. Members. We have normally a three-, four-, and sometimes five-year span, and in happier times we would not feel it appropriate to have an annual review. The course that I suggest would have been much wiser.
Such a course would have dealt with the position of hon. Members in a way open to all occupational funds under the existing Revenue rules. It would have used a vehicle that is available to the generality of occupational pension funds and without any legislation, let alone special legislation applying just to a small select band.
If I interpret correctly an answer that I received today from the Treasury—I appreciate that whether the answer is


correct depends on whether the Treasury interpreted my Question correctly—at present it would have been possible by this course, without legislation, to pay to hon. Members pensions only 5p in the pound lower than they will receive under the Bill, and that that shortfall would have been made up by the inexorable advance of inflation by the end of this year.
Therefore, by putting my name to the amendment, I do not wish to damage hon. Members financially. What I want to do is avoid taking a course which I believe will damage the reputation of the House.

8.44 p.m.

Mr. Clement Freud: The Minister spoke with a silver tongue and before a very thin House, but the fact remains that what we are debating is written on the first page of the song sheet that we have:
The main purpose of the Bill is to amend the Parliamentary and other Pensions Act … to enable the pension benefits of Members, Ministers and other office-holders to be based on a pensionable salary higher than the salary actually paid".
I do not want to be technical, mechanical or procedural, because those causes have already been argued by other hon. Members. Like the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), I should like to consider the moral or ethical side of what we are trying to do.
I consider that the Bill seeks to bring about an ugly precedent. It ill becomes us to be party to legislation for our specific benefit, especially while we are exhorting others to show moderation. Quite simply, I am against further elitism, because I think we already have enough in this House.
I am against voting for ourselves benefits which we are denying other people, because we already do quite well when it comes to benefits. We have spent £2½ million on a car park when all that most of us wanted were offices. We have a £300,000-a-year loss on the catering services, which are run especially for our benefit, and we have a ratio of staff to customers which no commercial catering establishment could match. We have spent £28,000 on a porch in case it rains —and would that it would, for my farmers

are desperate for the stuff. We are heated very much more than any of us want to be heated.
What I object to is that, with all the benefits we receive and which many of us do not want, we are here—in the absence of a senior Minister, in the absence of the Lord President, who might at least have looked in—to vote for ourselves a financial benefit based on a salary we do not draw. I am in favour of inflation-proofing, but we already have that. What I am against is that we should get what other people want and that we are party to achieving this.
Last week I saw a man in my constituency who had been a regimental sergeant-major. He had retired from the Army 11 years ago on a pension of £9 12s. 6d. a week. He now gets £41–16 a month. In 11 years his pension has remained absolutely static. Not for him a retrospective decision to base an inflation-proof pension on a notional wage.
To have the courage to pad our own future while manifesting our current reluctance to reward our present endeavours is humbug. I look forward to the day when we can pay ourselves what other people think we are worth. We can then base the pensions on that.
I support the amendment moved by the hon. Member for Somerset, North (Mr. Dean), because this is a rotten time to introduce what is quite demonstrably an elitist—I cannot find the right word—Bill. When the rest of the people in the country reap the benefits of their work, we shall have the right to reap the benefits of ours and receive an appropriate pension.

8.48 p.m.

Mr. Eric Ogden: The hon. Member for Isle of Ely (Mr. Freud) could not find a word to describe the Bill but he made it reasonably clear that he did not like it. Neither did the other two hon. Members who spoke from the Opposition Benches in support of the amendment.
The hon. Member for Morecambe and Lonsdale (Mr. Hall-Davis), a fellow Lancastrian, will not be too upset if I note that he used the words "select band" three times. It might be our peculiar Lancastrian humour, but that


reminded me of two old hymns. I am not certain whether he had in mind
Oh happy band of pilgrims,
If onward ye will tread
or
Through the night of doubt and sorrow,
Onward goes the pilgrim band".
My complaint is not that the Bill provides a privileged position for Members of Parliament regarding pensions. I accept that it does. But I ask the House and people outside to set against that the underprivileged position which the House of Commons has imposed on itself in the last 12 months and which the hon. Member for Isle of Ely left out of his list of the advantages of membership of this House.

Mr. Freud: I am very well aware of that, but the hon. Member must know that we are not the only people who have denied ourselves what we thought we were worth. Not only that, but we have been exhorting other people to ask for less than they are worth. That was my point.

Mr. Ogden: The hon. Gentleman's dates and exhortations have got mixed up. We are the only group of workers who have had their salaries and allowances for the job put to an independent arbitration body outside this House for assessment. Having had our salaries and allowances assessed by an independent arbitration organisation, we have voluntarily accepted one-third less than was recommended. To my knowledge, no one else has done that. We did that to set an example. No one seems to have taken any notice of it either at the time or since.
I accept that the Bill will provide a privileged position for Members of Parliament regarding pensions, but that must be balanced against the underprivileged position which we have reluctantly accepted or imposed on ourselves because of the general limitations which we have agreed.
My choice of hymns may have excluded me from membership of the Committee on the Bill, if it gets that far. I make no complaint. However, I say to my other fellow Lancastrian, the Minister of State, that it would have been nice if the Leader of the House had looked in on this debate. This might be a difficult

time for the Leader of the House to announce what Lord Boyle recommended and what the Government recommend, but to my knowledge my right hon. Friend's predecessor, my right hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Short), never neglected his duties in putting unpopular decisions before the House. I do not know what duties are keeping the Leader of the House away tonight, but it would have been nice if he could have shown his interest in the Bill and support for the Minister of State.
Someone in the House should bluntly say that the pension proposals included in the settlement of last June and July were made on the basis that Members would limit their acceptance of salary to one-third of that which was offered because the Government would then provide a pension based on the notional salary.
I understand that I am not supposed to use the word "bribe" in this House. I might get away with "inducement". It was an encouragement for Members who were approaching pension time to accept less in real terms if this would not affect their pension rights at a later time. Therefore, last July Members were encouraged to accept the one-third limitation, because their pensions would be covered to a degree. That is a fact of life which we should bear in mind. That helped the Government to get through their proposal that we should take less than the real salary at that time. If it was not a bribe, it was a real encouragement.
On Second Reading we talk about what might be in the Bill. I ask my hon. Friend the Minister of State, what has happened to the Boyle Report on pensions which was due last November? There was talk of its being delayed and then being considered.
It is now nearly 12 months since the last negotiations on pensions and rights. Last year I thought we had got away from discussing and negotiating the salaries and allowances of Members of Parliament across the table. I much preferred meeting the National Coal. Board across the table and arguing about a halfpenny on a ton of coal. There is nothing shameful about a man arguing for the rate for the job.
What, if anything, are the Government doing regarding a Select Committee to look into the possibility of linking our salaries to a grade in the Civil Service after the next General Election? The Government presumably accepted the Resolution of the House last July. What action, if any, has been taken to implement that proposal or to bring proposals before the House?
Are there any proposals that Members of Parliament should accept the limitation placed on everybody else from 1st August last year? Are we entitled in July or August to a £6-a-week pay limit increase? Will the same limit apply to us as applies to other people? If we are only to take what is available to others outside, what proposals have the Government on the £6 limit? Will the Minister of State tell me whether any hon. Member who so strongly objected to our taking any increase last year, even an increase limited to £6, has refused his increase or paid it back?

Mr. Tim Rathbone: Yes, they have.

Mr. Ogden: I think there may be some. Let us hear about them.
This is not a good way of negotiating salaries and allowances. We may well be in a privileged position on pensions—I accept that—but on the whole package we are in an underprivileged position, and the sooner we get out of that the better. This is not the way of doing it.

8.56 p.m.

Mr. John Stokes: I join with hon. Members on both sides in deploring the absence of the Leader of the House from this debate, which concerns us all. No doubt many hon. Members, and the general public—if anything of our debate is published tomorrow—will consider the Bill as a small piece of tidying up, and I suppose it could be considered in that light.
We are always embarrassed about our remuneration and we usually manage to make a mess of it. On the last occasion, to avoid this embarrassment we asked Lord Boyle to consider our salary levels. I agree with my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-

Davis) that Lord Boyle took an intolerable time about it, but in the end, after a thorough and impartial investigation, he concluded that £8,000 a year was the right figure for the salary of a Member of Parliament.
I shall not go into the reasons why the figure was not accepted either by the Government or the House, or why the figure of £5,750 was agreed in the end as being appropriate. Clearly, underlying this decision the Government and the House felt that £8,000 a year was correct. That is why, in the Bill, our pensions will be based on the notional figure and not on £5,750.
We all know that the House can do what it likes with itself. I support the present proposal, but it would look decidedly odd if other bodies behaved in the same way. We must admit, therefore, that our action is peculiar unto ourselves, and we all devoutly hope that it will not be used as a precedent by anyone else. One reason for my supporting the Bill is that many older Members are not well off and stay on here because they simply cannot afford to retire. However wrong or illogical we may think the Bill, if we fail to pass it tonight we shall add to their hardship.
My second point concerns the level of salaries of the Prime Minister, the Speaker and the Lord Chancellor. I have long held that these salaries—and all other Ministers' salaries—are miserably low, either by comparison with other senior posts in the United Kingdom, in the Civil Service or in private industry and commerce, or by comparison with the remuneration of Ministers in foreign Governments.
A case can be made for paying ordinary Members of the House nothing—I believe that is the view of a minority in the House—or they can be paid £1,000 a year or £10,000 a year, to which inflation will probably have brought £8,000 before the next revision is made, but I believe that Ministers should be properly paid for the jobs they do. Incidentally, is it proposed that Ministers should also have notional salaries on which pension fund contributions will be paid? Perhaps that could be cleared up.
Lastly, I should like to give a quotation from The Times leader of 23rd April,


which illustrates my point about Ministers' salaries. The article says:
The situation of the Chancellor will be this: a Chancellor's gross income from public funds comes to about £16,000 a year; supposing him to have only the married man's allowance, a Chancellor has a net taxable income of £14,915 on which his tax liability will presumably be £7,690, leaving him with a net income of £8,210, That is pretty miserable pay considering the responsibility of the job. It works out at £2·50 an hour in take home pay, on the supposition that the Chancellor works a sixty-five-hour week.
Ministers' salaries are a disgrace, and nonsensical. It should be a first priority of the Government and the Leader of the House to examine the level of Ministers' salaries before anything more is done about Members' salaries.

9.3 p.m.

Mr. Bob Cryer: I am interested that the reasoned amendment, which is signed by only two hon. Members, has been called. When 100 or more Labour Members table amendments to motions on public expenditure White Papers or defence reviews, that precedent will be remembered.
One reason for my intervening in the debate is that I do not wish Opposition Members who talk about privilege to get away with it. The Conservative Party is the party of privilege, and it is hypocritical for Conservatives to oppose a Bill to increase pensions when most members of the Conservative Party receive a salary as Members of Parliament supplemented by large salaries as directors of companies. They are not in the same position as working people outside Parliament, who cannot ask the boss for a day off to go to a board meeting in Bognor Regis because the boss will give them their cards if they do.
It should be no part of the Government's policy to put forward this legislation when a few weeks ago they were telling pensioners that they could not have a modest increase in their pensions—making a total of £6 in 18 months—until November.
We must not be surprised if people outside tend to say that the Government are pushing through this legislation. We know that there is a sort of consensus approach, with everybody here coming to the conscious-torn decision to support increases in their pensions, but a Labour Government will incur the odium of

people who say that we can increase our own pensions but cannot put up the pensions of ordinary people. It is no part of the Labour Government's programme to carry through such legislation.

Mr. Ogden: I hope to be around for some time before I draw my pension. I shall be voting for increased pensions not for myself but for my hon. Friends who are retiring at the end of this Parliament. I hope it will be some time before I get any benefit from this legislation.

Mr. Cryer: Many of the people who support us and who put us into power do not have the opportunity to save, and they have no superannuation schemes. They have only the national pension on which to live and they are facing great difficulties.
We phased out subsidies for the gas and electricity boards and are now being criticised for increases in gas and electricity charges. People whose only income is the national pension find the greatest difficulty in making ends meet. We must bear these realities in mind.
I understand that my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) is thinking of others, but people outside may not interpret our action in that light. They will say that we are putting ourselves into a good position, and it is not the purpose of the Labour Party to do that.
The Labour Representation Committee was formed in 1900 with the idea that if we got representatives of working people into Parliament their experience would bring to bear on this place ideas and a momentum for change that would produce the sort of society in which we wish to live.
If we treat ourselves as members of an executive market place, in which we are taking such frightfully high responsibilities that we must always have more financial reward, we shall become removed from the social responsibilities on which the Labour Party was based. I sometimes wish that people would talk more about doing things because they felt a commitment to do them and not continually saying that because they form a particular group, making particular decisions, they must have financial returns the whole time.
I presented a Ten-Minute Bill providing for the election of heads of nationalised industry boards, in the hope that we would get talent from among the workpeople of the industries and might have chairmen who were not wholly concerned with financial reward and seeking ever increasing income in a spiral of financial returns.
The whole pattern of the Bill seems out of character with the aims of the Labour Party and the Labour movement. I was a little staggered to note that the Bill contained two clauses with retrospective effect. When retrospective legislation was proposed in the case of the Clay Cross councillors, the Opposition were dancing with rage, claiming that we were introducing a new principle and that we never had retrospective legislation in this House. I do not mind retrospective legislation; it is necessary in some circumstances. But the Labour Government were not too happy about it.
The Labour Party conference passed a motion to lift the surcharges imposed on the 11 Clay Cross district councillors who were carrying out Labour Party policies, employing people who were unemployed and ensuring that warden accommodation was properly serviced. The Secretary of State for the Environment said that if we removed the surcharges we should be applying retrospective legislation. Not even Clause 4 of the Housing Finance (Special Provisions) Bill, which would simply have lifted the penalty of disbarment from the 11 Clay Cross councillors, was agreed to by the House. It is a different set of values that is displayed tonight by those who were prepared, in the Chamber, to vilify and accuse the Clay Cross 11, to talk about the great principles of Parliament as though they have to be laid down without any possibility of flexibility. They said that the principles were firm and fast, that the Clay Cross Councillors were totally wrong and that nothing could be done.
When it comes to an increase in pensions with retrospective effect for a group of people who are not on the bread line, who do not live in two-up and two-down houses in terraced rows in provincial towns, who, by and large, are receiving very good salaries and are in an elitist

group within our society, where are all the Opposition? They are not here. They have gone home in the cosy knowledge that the Bill will slip nicely through. Let us expose the hypocrisy that exists in this place. In fact, the Bill in no way represents Labour Party politics and the ideas for which the Labour movement has stood over the years. The Clay Cross 11 stood far more closely by the standards of the Labour Party than this Bill does.
I shall not vote against the Bill. [HON.MEMBERS: "Oh."] I was not elected as a Labour Member of Parliament to go into a Lobby with Tories on the basis of a hypocritical reasoned amendment that represents a total divorce from reality. I shall not vote against the Bill. I shall abstain, like a number—[Interruption] That may cause some amusement. The Opposition may find it amusing that some of us wish to abstain. Let me remind Opposition Members of what happened three or four weeks ago, when 38 Labour Members abstained from voting on the public expenditure White Paper. They did not say that that was a weak gesture. They were asking "What about a General Election?" That abstention was not regarded as a weak gesture.
The Chancellor, not to put too fine a point on it, got quite cross, not too far from where I am standing. He used what might be termed blunt language about the abstention. The former Prime Minister, my right hon. Friend the Member for Huyton (Sir H. Wilson), was pretty critical about the abstention. So was the Chancellor, in what might be termed a more formal manner, when winding up. Let it not be thought that abstention is a meaningless gesture; it is not. Within the context of this situation it is a reasonable position for some of us to adopt.
We were most surprised that the reasoned amendment was called. Our experience, after collecting over 100 signatures and seeing Mr. Speaker, was that there was not a possible chance of the amendment being called. We were startled to hear it called and to know that a vote was to be taken, bearing in mind that it bore the signatures of only two hon. Members.

Mr. Deputy Speaker: I think that the hon. Member for Keighley (Mr. Cryer) is getting a little near the mark. He must


not under any circumstances question Mr. Speaker's decision as regards the amendment.

Mr. Cryer: I should never question Mr. Speaker's selection, but I can express surprise at the result. These matters should be placed on record so as to make it clear that some of us are not too happy with this legislation.

9.14 p.m.

Mr. Ian Gow: This Bill was presented to Parliament by the former Leader of the House. It is a fact on which many on both sides of the House have commented already that the new Leader of the House is not here to present and defend the Bill tonight. It is no commentary on the Minister of State to say that we believe that the Lord President should have been here. The hon. Member for Islington, South and Fins bury (Mr. Cunningham) expressed surprise, in an intervention when the Minister was moving the Second Reading, about the Lord President not being here. I suspect that the reason why the Lord President is not here is that he does not like the Bill and is rather ashamed of it.
I believe that the Bill is a miserable measure. It is miserable for three reasons. The first is that Parliament should at all times be very zealous about scrutinising public expenditure. If it should be zealous at all times, it should be doubly so at the present time and trebly so when the expenditure that we are being asked to approve is expenditure which confers a special privilege on Members of this House.
As regards the financial effects of the Bill, we are told that in a full year the additional cost to public funds will be £330,000 only, in respect of the additional pensions contributions and in respect of the salary supplements to Members. Even on a day when in a four-hour debate we have given a Second Reading to the Industry (Amendment) Bill, which increases the limit of so-called Government assistance to industry from £350 million to £1,600 million, I regard it as very much the duty of all of us to scrutinise and to protest, as my hon. Friend the Member for Somerset, North (Mr. Dean) did, about this further expenditure of £330,000 a year.
Although the sum of £330,000 a year is trifling as compared with the deficit this year of £12,000 million, it is symptomatic of a disease which is afflicting this House in a very serious way at present —namely, that we go on passing legislation to increase public expenditure while all of us know that, though we continue to operate in this way, the harsh reality of the economic situation is fast catching up with us.
That is my first objection. I disapprove of an additional £330,000 of public expenditure, and notably when this confers a privilege on Members of the House.

Mr. George Cunningham: Does the hon. Gentleman agree that the real disease which afflicts this House and kills it dead as a working organisation is that every Member wants to be a Minister and pulls his punches?

Mr. Dennis Skinner: No.

Mr. Cunningham: There are exceptions, but for practical purposes every Member wants to be a Minister and pulls his punches in order to be a Minister. One reason—only one—which leads that to be done is the vast differential in the remuneration of Ministers and those who have no other interests. There are some exceptions. Although that is only half of the story, it is one of the factors that makes this a non-working legislature. Is that not one reason for voting for a Bill of this kind?

Mr. Gow: I do not really see the relevance of that intervention to the point I was trying to develop. In any event, I find myself in disagreement with the hon. Gentleman.
I was coming to my second objection to the Bill, which is that the measure is retrospective, with retrospective effect to 13th June 1975. That is more than 10 months of retrospection.

Mr. Ogden: But it was announced at the time.

Mr. Gow: I was talking about the Bill being a retrospective measure. That is incontrovertible.

Mr. Ogden: The hon. Gentleman will forgive me for having previously interrupted from a sedentary position. The intention was announced last July when we passed legislation through the House.
We all know that it was the Government's intention to bring forward legislation to link pensions to a notional salary. The intention was announced almost 12 months ago.

Mr. Gow: I appreciate what the hon. Gentleman says, but it does not alter my point that I believe that there is a principle involved about retrospective legislation and that that principle is being violated by Clause 1 It is retrospective for a period of more than 10 months, and I object to that.
My third objection is that we are creating an Alice in Wonderland situation for the benefit of Members of Parliament. The Alice in Wonderland situation is that we are saying to hon. Members, but to nobody else, that their pensions will be calculated not on the salary they receive but on a figure which the Government say is to be taken as the notional salary. That will be totally incomprehensible to people outside the House. To say, as is said in Clause 1 of the Bill, that an hon. Member's ordinary salary is to be regarded for pension purposes as being at a higher rate than it actually is is the kind of world of make-believe and double-talk which should not characterise our legislation.
I believe that the Bill will create a bad impression outside the House. The arguments advanced by my hon. Friend for Somerset North were compelling. I support his amendment and I hope that the House will have the opportunity to divide on it.

9.22 p.m.

Mr. Tim Rathbone: I am delighted to follow the speech of my hon. Friend the Member for Eastbourne (Mr. Gow), who is my political neighbour. Before coming to my own arguments I shall add two riders to his argument.
To underline the element of expenditure involved, I have calculated that the money on which we shall vote is the equivalent of the Government's borrowing for about 12 minutes. That is far too much Government borrowing. My second rider is on the retrospective element. I share my hon. Friend's concern about retrospection from now, but even if it is not retrospection from now—because it was announced last year—it is retrospection from July last year until

15th June this year. There is an element of retrospection in whatever way it is examined, although it might be a small element.
My argument concerns what is or is not a commitment to pay an increased pension on the basis of a hypothetical salary which has not been granted. The former Secretary of State for Employment, now Lord President, touched upon that point on 23rd July last. It raises the question of what is a commitment to grant a pay increase. If on 13th June, the date to which the Bill is backdated, or on the date when the Boyle Report was presented, there was a commitment to pay an hon. Member a salary of £8,000, the need for this Bill is questionable. That is because it was already covered by the right hon. Gentleman in his speech last year. It would also be reassuring to people outside the House to know that hon. Members were being treated the same way as they are themselves in their own pension schemes.
I doubt whether the amount of £8,000, or the date for payment of that amount, is in any way a commitment. I do not believe that the Government should say they will pay us more at some moment in the future and that it will be an amount to be decided upon at some future date.
But if—and I fear that this is more likely to be the case—there is no real commitment as to the absolute amount or the date when it will be paid, the Bill truly proves that Members of this House are prepared to set themselves apart from other people who are suffering under the inhibitions of our economic constraints, most particularly the Government's wages policy. In the same way as I felt that our pay increases which were granted as from 15th June should have been limited to £6 a week, which was the figure to which the Government were asking the country to limit its pay increases, I believe that our pensions should be on the same basis as other people's.
The Government and elected representatives, more than any other group of people, should abide by the principle of asking people to do as they do rather than as they say.

9.26 p.m.

Mr. Ronald Bell: It is much more agreeable not to take part in


debates of this kind, because the subject is distasteful, but I feel a duty to take part and to say what I believe to be the correct approach to the subject.
I have the misfortune to disagree with my hon. Friends the Members for Lewes (Mr. Rathbone) and Eastbourne (Mr. Gow), because I have seen this process going on for a long time. I can remember when Parliamentary Secretaries were paid £1,500 a year. That went on and on, almost for ever. In 1831, I think it was, Secretaries of State were paid £7,500 a year. In the interests of economy they accepted a cut to £5,000, and 130 years later they were still receiving £5,000 a year. That continued right up to a few years ago. It was an astonishing situation, which constantly excited attention.
I remember the evidence that Mr Stanley Baldwin gave to a Select Committee. Asked how that had gone on for so long, he replied "I suppose it was because we all had a sense of delicacy about our own remuneration, and the moment never seemed to be right." That is the answer. The moment never is right for politicians to increase their own remuneration. I am sorry to say that it is rather a popular cause for politicians themselves to oppose any increase in their remuneration. It may be not be popular with some people in my constituency that I defend it, but we should have the courage of our convictions in this matter.

Mr. Rathbone: I follow my hon. and learned Friend's argument, which he makes from a position of far greater seniority than I have and perhaps ever shall have. But the point is that there is no moment, in his experience, that was wronger than it is now, because at no moment have the Government been invoking restraint on the part of the people to the degree that they are now.

Mr. Bell: With great respect to my hon. Friend, the invoking of restraint is a permanent feature of our political life. There always is a moment when it never could have been wronger, if I may use a somewhat involved expression, just as there never has been a time in our parliamentary history when the reputation of Parliament has not stood lower than ever before. One can look back over the records, the newspapers and history books, and see that the reputation of

Parliament has always been at its lowest ebb. "Retrenchment" has been one of the permanent cries in our history.
We must apply a little realism and common sense to the subject. We have been setting ourselves apart, of course—but in what respect? We have treated ourselves differently from everybody else in the community in that, there having been an inquiry into the proper rate of remuneration for Members of Parliament, it was recommended that after nearly five years of static remuneration the appropriate remuneration was £8,000 a year. It was not we but an impartial committee set up to do the job which decided that.
If that recommendation, or something similar, had been made in respect of some other occupation at the time, the class of persons about whom it was made might have accepted that they would receive less than the recommendation. In other words, if a figure of £8,000 had been recommended, the final figure accepted might have been £7,500, 7,250, or possibly even £7,000. But what category of people would have accepted £5,750 in relation to an award of £8,000? I suggest that nobody else would have done so. I thought that we were right to do so and to set an example, but by so doing we set ourselves apart. We did something that no other section of the community would have considered remotely reasonable.
The practicable question arises whether the pensions of older Members of the House, who may be at the point of retirement, should be prejudiced because of what appears to be a temporary crisis in the nation's finances. We did something similar for a similar class of public servant in recent years, and it makes sense, although in one sense it is anomalous. However, it is far better to have the plain courage to get somebody else to decide a proper rate of remuneration and to abide by it—otherwise, we shall store up trouble for ourselves. We did so by waiting four and a half years, in a time of inflation, to rectify the matter. Although the recommendation may be 50 per cent. or 60 per cent., nobody takes into account the four and a half lost years, the compound interest, the deferment element, and all the rest of it. If the figure is compared with what other people are to receive in one year, it puts


the other category in a vulnerable position.
The Boyle Committee, 18 months ago, said that the appropriate remuneration for Members of Parliament was £8,000 a year. Nobody thinks that next year or the year after that that the figure will be implemented. What will be the appropriate remuneration for hon. Members in three years' time? Will it be £9,000, £10,000 or £11,000? Does anybody think that it will be easy, then, to go from £5,750 to £10,000 or £11,000? This is the process taking place decade after decade. I have already said that this process occurred for a period of 130 years because people were scared of taking any action, until eventually the situation became so scandalous, especially for junior Ministers, that the Government could not have carried on unless something had been done.
Various devices were used to meet the situation. We saw the introduction of Ministers of State, which was simply a device to pay Parliamentary Secretaries more money without having to put through an increase—

Mr. Charles R. Morris: Not now.

Mr. Bell: It is true historically, but of course is no longer the case. Almost everything has been done to avoid being open, full and frank about the matter. It is time for the humbug to stop. There is no doubt that recently we have got ourselves in a humbugging position. We have to remedy the matter tonight.
I do not like this Bill and, so far as I can see, nobody does. But, logically, there is nothing else to do this time but support it. On Monday we shall debate the Finance Bill, which is retrospective to the date of the Budget Resolutions. Since this matter refers back to a resolution, I suppose that there is that element of retrospection about it. Disagreeable though it may be, we must take this step. At some point we must link our remuneration automatically to sensible machinery. Although we passed a resolution, it was non-operative.

Mr. George Cunningham: It was as operative as any of them.

Mr. Bell: It was not a resolution that took effect. At some point we must do this, because it is a bad system and a

bad procedure. It creates a bad reputation for politicians, and ends up by putting those in public life at a considerable disadvantage, to put it mildly, compared with those in other countries perfoming remotely comparable functions.
I hope that the Bill will go through tonight but that at the same time it will serve as a starting point for a little thought on the subject, so that we can institutionalise our arrangements and get away from the dreadful business of haggling and wrangling about every change in our remuneration or allowances every time the subject comes up.

9.36 p.m.

Mr. Roger Moate: I should like to touch very briefly on a couple of points made by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell). I agree with him in his dislike of retrospective legislation. I agree also that the Bill cannot be objected to on those grounds. We are going back only to the date of a resolution of the House, and I do not believe that is unfair retrospection. It was a clearly expressed view of the House that a certain decision should be taken from a certain date, and I think it is quite a reasonable basis for subsequent legislation.
Where I disagree totally with my hon. and learned Friend is on the view that there is no other course but to support the Bill, and that to support it would be ending humbug. I think, frankly, that the Bill is humbug. There is a respectable argument to be made—I know that my hon. and learned Friend takes a different view—about the level of salaries. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) put the case very strongly. He believes passionately that the right figure was £8,000 a year, or whatever Boyle recommended. My hon. and learned Friend thinks that it should be a high figure. For some reason he endows Boyle with some degree of sanctity, as though that was the greatest wisdom and the rate for the job, and that everything else ought to flow there after.
Others believe, as I do, that on balance salaries should be rather low, and that the end result of lower salaries would be a better House of Commons. [Interruption] I accept that there is a real difference of opinion, but the fact remains that


the House of Commons, for various reasons, decided that at this time the salary was not to be at a level of £8,500 or £8,000 a year but at the lower level. Whether it was a lack of courage, an act of wisdom, an act of sacrifice or an act of restraint, the House decided that the salary should be at a certain level, and it is the utmost humbug to go into the Lobby in support of a proposition that our pensions should be based on a very much higher level than the salary we had the courage to vote for ourselves. That is humbug, and I believe it is a cheat. I think it would be seen by the public to be misusing the special privileges of the House—the special power that we have to vote our own salaries, our own remuneration, and our own pensions.
Earlier my hon. Friend the Member for Halesowen and Stourbridge (Mr. Stokes) said that he hoped others would not follow this precedent. The fact is that they cannot follow it. If they sought to do so they would have to come to Parliament for legislation. We shall not legislate for them; we shall legislate only for ourseves, for our own special benefit.
At this moment many millions of our people have, for a variety of reasons, accepted lower salaries than they think they are entitled to receive. The Chancellor of the Exchequer, in particular, has of late wept crocodile tears for these people, in the same salary bracket as Members of Parliament, who thought they were entitled to far higher remuneration. These people are in the middle executive range. They are not getting the sort of salary to which they feel entitled, and their pension entitlement is based on the salary that they are getting and not on the one they would like to have.
Yet Parliament, tonight, is proposing to vote in favour of a very high notional salary, with the equivalent pension. Any hon. Member who votes for the resolution will have a very difficult job to explain it to his constituents, colleagues, friends and associates tomorrow, when they ask why they could not have similar privileges.

Mr. Ronald Bell: Does my hon. Friend suggest that £8,000 a year is a very high notional salary?

Mr. Moate: That begs the question about the argument on parliamentary remuneration. If we voted for what we thought individual Members were worth, we should probably end up with variable salaries. Some hon. Members contribute magnificent services to the House—services that would be worth millions of pounds a year. Others justify a negative figure. But that is not the point. The question is whom we want representing us in this House. I suggest that if we abolished salaries altogether there would still be a long queue of people seeking election, and it is quite possible that we should see many of the same faces on these Benches.
I think that the Bill is a misuse of the privileges of this House. If we passed it, we should be legislating a special privilege for Members—a privilege that I believe would be seen by the public to be a total misuse of our powers. I hope very much that those of my hon. Friends who have spoken so strongly and persuasively will go into the Division Lobby against the Bill. If they do not, having spoken so strongly against it, that, too, will be seriously misunderstood.
I hope very much that there will be a vote, and that the House will see the wisdom of the case advanced by my hon. Friend the Member for Somerset, North (Mr. Dean) and carry his amendment.

9.42 p.m.

Mr. David Howell: Whatever we think of the Bill, I think that we can all agree that this is an ugly, miserable and messy business. It has been described as everything from "distasteful" to the phrase of my hon. Friend the Member for Lewes (Mr. Rathbone), "never could be wronger", which is a suitable ungrammatical epitaph to the whole affair.
It is an unavoidable business. It cannot be ducked, although whoever fixed it to be taken at this hour on a Thursday evening had a good try at ducking it. It is a matter to which we have to turn our minds and on which we have to reach decisions. When I say "we", I wish to underline what I thought was one of the correct observations of the hon. Member for Islington, South and Finsbury (Mr.Cunningham)—although I did not agree with all that he said—about this being the business of the House. Of course it is, and it is the business of the House to


reach agreement on what, if any, our remuneration and pension arrangements should be.
I am sorry to see that this evening the Lord President decided to be invisible and not to take part in what is a difficult job for any Minister. We salute the presence of the Minister of State to do his bit.
The Lord President's text, if that is the right word to use in connection with someone who describes himself as an archangel, was the one quoted by my hon. Friend the Member for Somerset, North (Mr. Dean), from the debate on 23rd July on the Remuneration, Charges and Grants Bill, when the right hon. Gentleman said:
It will also be open to those concerned to decide, if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July"—
and then the very ambiguous words at the end—
even though that commitment may be limited by the new policy."—[Official Report, 23rd July, 1975; Vol. 895, c. 688.]
I am not sure what those last words mean. But that was the text, and that is the date that we have been debating.
If we ask whether there was a commitment beforehand or an agreement after 11th July, there can be only one kind of agreement about the view of this House on how it should remunerate itself, and that is an agreement reached by a resolution of the House. There is no other way in which an agreement can be reached. There is no other commitment. There are no mythical publication dates when a review board said that something should happen. So, if we are to argue about these narrower points—because in a sense they are technical, in the same way as the whole of the £6 policy was not statute law but a curious, mixed, amphibious animal, lying between law and voluntary endeavour by the citizens—it is clear that 11th July lay before the date when the House agreed on the resolutions, one of which required the amendment to the Parliamentary and Other Pensions Act 1972.
There is no escape, there is no dancing around the point. This is what we have decided for ourselves, and in doing so we have conferred upon ourselves—and,

indeed upon various dignitaries of State and servants of the House as well—a different treatment from that which the Government have urged on millions of workpeople under their policy. They have not passed a law about it, but having urged it and passed surrounding legislation, they have indicated that difficulties will arise if their policy is not followed. That is the distinction that we have conferred upon ourselves.
We should be wary about conferring upon ourselves distinctions of this kind, just as we should be wary of allowing the State and the Executive to confer on its servants special privileges and distinctions over and above those available to millions of workpeople. The question that is rightly raised by the movers of the amendment—my hon. Friend for Somerset, North recognised it as a distinction or, as some would call it, a privilege—is whether one should go on from there and say that it should not be granted, that the House reached the wrong agreement about its remuneration, that we made a mistake, or whether it would have been a better course if the Government had never sought to interfere in the first place with arrangements for the payment of pensions and the improvement of pensions schemes, if they had never got into the tangle of deemed rates of pay and notional rates of remuneration, and that then, none of this difficulty and embarrassment would have arisen. I am inclined more to the latter view than to the former, but this raises much wider issues about the kind of business the Government set about in the late hours towards the end of July last year, when they brought in the Renumeration, Charges and Grants Bill.
As my hon. Friend the Member for Eastbourne (Mr. Gow) said, Clause 6 provides a new means of setting the salary, as well as provisions for pensions, of the Comptroller and Auditor General and other servants of this House. Here again I emphasise the phrase of the hon. Member for Islington, South and Finsbury: these are matters which are the business of this House. I sometimes think that Governments—the present Government are not the first to make the mistake—have been inclined to overlook that point. When we consider the Comptroller and Auditor General's salary it is worth reflecting—what I say now is


no imputation at all against the present incumbent of that position, or upon past or future incumbents—that if this high officer is a servant of the House, his appointment should perhaps be rather more a matter for this House than it has been in the past.
I know that people argue that it is best to have someone from inside in the position, because he knows the system, but one can just as well argue that it is best to have someone from outside, because he will bring a fresh approach to the whole situation. This is not an issue that can be resolved in neat terms—there could be one appointment from inside and another from outside—but when it comes to discussing not merely the remuneration and the pension but the appointment of this officer, Parliament should have a much stronger determination to decide whom it should be, rather than readily accepting what the Executive has decided.
The basic point was touched on by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell). He said that what we must have the courage to do is to identify the proper weight and apply it. We should begin to work our way out of our present tangle—a tangle that was intensified by the Government's mishandling last summer and the way in which the whole matter became hopelessly involved with their £6 policy and their attitudes to the fixing of remunerations, rewards, wages, salaries, pensions and everything else. If we can take courage and establish the proper rate, we shall escape those difficulties in future.

9.51 p.m.

Mr. Charles R. Morris: This has been an enlightening, illuminating and in some respects sad debate. As a Minister, and certainly as a Member of Parliament over the years, I have shared the concern about the regard in which the public hold the House and Parliament. I am tempted to wonder what contribution some hon. Members have made tonight to public understanding of Parliament and of the circumstances and conditions under which hon. Members serve the electorate.
Let us consider some of the adjectives which have been used to describe the Bill. The hon. Member for Guildford (Mr. Howell) described it as an ugly, miserable and messy business. The hon.

Member for Isle of Ely (Mr. Freud) spread himself. He said that morally and ethically we were establishing an ugly precedent—legislation for our own benefit. Everyone is entitled to his point of view and I would be the last to question anyone's sincerity, but the Bill has been represented as an example of parliamentarians establishing some privileged position for themselves.
In seeking to refute that argument, I would say that it ignores the fact that in 1975 Members of Parliament had not received a pay increase for three and a half years. Let any hon. Member identify any other section of the community who have been in that position and then put forward the view that parliamentarians are over-eager to put themselves in a privileged position. Those who identify themselves with that view are misrepresenting the position of MPs and committing a travesty of the facts.
Those who argue that we are seeking to establish a privileged position for ourselves overlook the fact that the appropriate rate for the job which hon. Members do was established by an independent body, the Top Salaries Review Body, and not by parliamentarians determining their own salary.
Once the TSRB had made its report, parliamentarians indicated that they were prepared to forgo an appreciable proportion of that £8,000 in the national interest and out of regard for the nation's economic difficulties. The same people who took that decision are now being represented as people who are concerned only for their own interests. One cannot have the argument both ways.
It is rather hard to listen to parliamentarians berating this measure, which seeks only to provide justice and a reasonable pension for those who have given many years of their life representing the interests of their electors as parliamentary representatives in this House. There are those who nod and shake their heads, but the fact remains that we have had disturbing examples over the years of parliamentarians who have shown the stresses of their services as individual Members of this House.
I want now to deal with the individual points raised during the course of the debate. The hon. Member for Halesowen


and Stourbridge (Mr. Stokes) inquired about the position of Ministers under the Bill. The salaries and remuneration of Ministers at the present time is subject to study and review by the Top Salaries Review Body. As well as basing the pension of Members of Parliament on a notional salary of £8,000, the Bill seeks to make the same legislative arrangements for Ministers and other office-holders when the TSRB reports to the House on those salaries.
The hon. Member for Eastbourne (Mr. Gow) inquired about the salaries of the Comptroller and Auditor General and the Parliamentary Commissioner. The salary of both those gentlemen is £18,675.

Mr. Gow: Following upon the point made by my hon. Friend the Member for Guildford (Mr. Howell), will the Minister take the opportunity this evening of indicating the attitude of the Government towards the Parliamentary Commissioner (Amendment) Bill tomorrow?

Mr. Morris: Not at this stage, and certainly not without notice. I can understand the hon. Gentleman's eagerness as far as that issue is concerned.

Division No.115.]
AYES
[10.0 P.m.


Body Richard
Hicks, Robert
Ridley, Hon Nicholas


Boscawen, Hon Robert
Hooson, Emlyn
Ross, Stephen (Isle of Wight)


Clarke, Kenneth (Rushcliffe)
Kenneth-Bowman, Mrs Elaine
Sims, Roger


Clegg, Walter
King Evelyn (south Dorset)
Stanbrook, Ivor


Dean, Paul (N Somerset)
Lawson, Nigel
Warren, Kenneth


du Cann, Rt Hon Edward
Miller, Hal (Bromsgrove)



Durant, Tony
Page, Rt Hon R. Graham (Crosby)
TELLERS FOR THE AYES:


Goodlad, Alastair
Powell, Rt Hon J. Enoch
Mr, Clement Freud and


Gow, Ian (Eastbourne)
Rathbone, Tim
Mr. Roger Moate


Hall-Davis, A. G. F.






NOES


Atkinson, Norman
Fowler, Gerald (The wrekin)
McMillan, Tom (Glasgow C)


Bagier, Gordon A. T.
Freeson, Reginald
McNamara, Kevin


Bates, Alf
Gillbert, Dr John
Mawby, Ray


Bell, Ronald
Golding, John
Maynard, Miss Joan


Bishop, E. S.
Grant, George (Morpeth)
Mendelson. John


Booth, Rt Hon Albert
Hamilton, W. W. (central Fife)
Millan, Bruce


Bray, Dr, Jeremy
Hardy, Peter
Molloy, William


Carmichael, Neil
Harper, Joseph
Morris, Charles R. (Openshaw)


Clemitson, Ivor
Harrison, Walter (wakefield)
Moyle, Roland


Cocks, Michael (Bristol S)
Hooley, Frank
Murray, Rt Hon Ronald King


Conlan, Bernard
Huckfield, Les
Ogden, Eric


Cook, Robin F. (Edin C)
Hunter, Adam
Ovenden, John


Cryer, Bob
Irvine, Rt Hon sir A. (Edge Hill)
Parker, John


Cunningham, G. (Islington S)
Jackson, Miss Margaret (lincoln)
Robinson, Geoffrey


Cunningham, Dr J. (Whiteh)
Janner, Greville
Ross, Rt Hon w. (Kilmarnock)


Davies, Ifor (Gower)
Jenkins, Hugh (Putney)
Silkin, Rt Hon S. C. (Dulwich)


Deakins, Eric
Judd, Frank
Silverman, Julius


Dormand, J. D.
Kerr, Russell
Skinner, Dennis


Douglas-Mann, Bruce
Lambie, David
Small, William


Duffy, A. E. P.
Lamond, James
Smith, John (N Lanarkshire)


Ellis, John (Brigg &amp; Scun)
Leadbitter, Ted
Snape, Peter


Faulds, Andrew
Lyons, Edward (Bradford W)
Spearing, Nigel


Fletcher, Raymond (IIkeston)
MacFarquhar, Roderick
Stallard, A. W.


Fletcher, T[...] (Darlington)
Mackenzie, Gregor
Stoddart, David


Ford, Bon
Maclennan, Robert
Stokes, John

A crucially important point was made by the hon. Member for Somerset, North (Mr. Dean) when he was seeking to argue the case that there was no analogy between the pension provision for Members of Parliament based on a notional salary of £8,000 a year and pension provision in the private sector. He developed his argument by quoting various dates—11th July and 22nd July. The Government's recommendations on this Bill are based on the date of the report of the independent Top Salaries Review Body, which was 13th June.

I am conscious that my hon. Friend the Member for Keighley (Mr. Cryer) suggested that a number of Members of Parliament had gone home in the cosy knowledge that the Bill might go through in their absence. That was an uncharitable attitude to many Members of Parliament who have pressing constituency commitments. At the same time, I hope that this measure will go through with the wholehearted support of the House.

Question put, That the amendment be made: —

The House divided: Ayes 24, Noes 84.

Tinn, James
Williams, Alan (Swansea W)



Tomlinson, Jonn
Woodall, Alec
TELLERS FOR THE NOE


Torney, Tom
Woof, Robert
Mr, James Hamilton and


Urwin, T.W
Young, David (Bolton E)
Mr. Thomas Cox


White, Frank R. (Bury)

Question accordingly negatived.

Main Question put forthwith pursuant to Standing Order No. 39 (Amendment on Second or Third Reading), and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — BUSINESS OF THE HOUSE

Ordered,

That, at this day's Sitting, the Parliamentary and other Pensions and Salaries Bill and the Motion relating to Ways and Means may be proceeded with, though opposed, until any hour.—[Mr. Harper.]

PARLIAMENTARY AND OTHER PENSIONS AND SALARIES [MONEY]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to amend the Parliamentary and other Pensions Act 1972 and to make

further provision with respect to the pensions and salaries payable to or in respect of the Comptroller and Auditor General, the Parliamentary Commissioner for Administration and the Health Service Commissioners, it is expedient to authorize—

(1) any increase attributable to that Act in the sums payable out of money provided by Parliament under any other Act; 
(2) any increase attributable to that Act in the sums which under any other Act are required to be charged on and paid out of the Consolidated Fund;
(3) any increase attributable to that Act in the sums which under any other Act are required to be paid into the Consolidated Fund.—[Mr. Harper.]

WAYS AND MEANS

PARLIAMENTARY AND OTHER PENSIONS AND SALARIES

Resolved,
That any Act of the present Session to amend the Parliamentary and other Pensions Act 1972 may make provision, with effect from 13th June 1975, for reducing the amount of relief from income tax under Chapter III of Part IX of the Income and Corporation Taxes Act 1970 in respect of qualifying premiums paid by a Member of the House of Commons who is also the holder of an office in respect of which he has elected not to be a participant under section 2 of the said Act of 1972.—[Mr. Harper.]

NORTHWICH (BULL RING SUB-POST OFFICE)

Motion made, and Question proposed, That this House do now adjourn—[Mr. Harper.]

10.11 p.m.

Mr. Alastair Goodlad: I am grateful to you, Mr. Speaker, for giving me the opportunity to raise before the House the important matter of the proposed closure of the Bull Ring sub-post office in Northwich, following the retirement of the present tenant next month. I am also grateful to the Under-Secretary of State for staying up until this late hour to answer the debate. I should like to take this opportunity to congratulate him on his appointment, on this his first appearance as Minister at the Government Dispatch Box, and of wishing him well.
When it was announced that the post office was to be closed, there was a storm of protest and a unanimous expression of disapproval in Northwich. As the Editor and Manager of the Northwich Guardian wrote to me,
I cannot ever recall a bigger explosion in Northwich than this week after it was announced, without any warning, the Bull Ring sub-post office would be closed in May.
In a letter from Messrs, Moss and Haselhurst, Solicitors, Mr. John Haslehurst, senior partner of the firm, said:
There is not the slightest doubt the Crown Office, or main post office, was in fact the centre of activities 30 years ago, but it no longer is. At one stage the Crown Office was surrounded by populated areas which have since been removed to council estates far remote from the Crown Office. Forty years ago the Crown Office was the centre of population. Now the whole centre of things is the Bull Ring, Northwich. There is no population in the Northwich town centre area. The business activities of the banks, solicitors, estate agents, accountants, shops, etc. are concentrated on the Bull Ring post office.
In a letter to the local newspaper, Mr. M. Evans, the branch manager of Hepworth, 70 High Street, Northwich, stated:
Whenever I go into the Bull Ring Post office to buy stamps, I almost always find a queue at both counters and the staff busy with one job or another. This surely is not a feature of a trading outlet that is not viable. In contrast, on the occasions I have called at the main post office there are rarely more than two positions manned and the staff are often

sitting around talking. I am not suggesting that the staff are lazy—but that the trade is spasmodic and mainly at peak periods, whereas trade at the Bull Ring is more regular and consistent. It would appear, therefore, to be financial suicide for the Post Office to shut down the Bull Ring branch.
A final point. As a manager of a one-man shop, I have to close the shop to buy stamps. When buying at the Bull-Ring, this entails closing the shop for only a couple of minutes extra as I buy them on my daily visit to the bank. However, if I were forced to buy at the main post office, that would entail closing the shop for an extra 15 minutes approximately—so in what way does this decision by the Post Office help traders remain efficient? We all realise every trader (except nationalised ones) must be efficient to stay in business. This country cannot afford many more business losses.
The post office at the Bull Ring serves many of the town's businesses, including solicitors, estate agents, traders and commercial businesses, and is also popular with many elderly people who cannot face climbing Witton Street to the main office. At times as many as four people arc employed on the main counter.
In a letter to the Chairman of the Northwich Post Office Advisory Committee, Mr. Arthur Platt, the head postmaster at Altrincham, Mr. V. Cooke, stated:
little inconvenience should be experienced by the business sector in that part of the town.
In a letter to Sir William Ryland, Chairman of the Post Office, I asked what evidence there was for that statement, which runs contrary to the unanimous opinion of business people in Northwich. In a reply dated 14th April. the Managing Director of the Post Office, Mr. A. Currall, makes no attempt to answer that question It is clear that a great deal of inconvenience would be experienced if the Bull Ring sub-post office were to close.
In my letter of 16th March to Sir William, I asked for details of the business conducted at the sub-post office in the last few years, compared with the business conducted at the main office. I informed him that I had written to you. Mr. Deputy Speaker, asking leave to raise this matter for debate on the Adjournment of the House. To my great disappointment, though with little surprise, I have to inform you that in the reply from the Post Office no details are given about the business conducted at either of the post offices.
Mr. Currall wrote:
although the Bull-Ring is a busy office, the amount of business transacted is considerably less than that of the nearby Crown Post Office. The head postmaster provided some figures confidentially to the Post Office Advisory Committee to illustrate this point which he was invited to attend after you had written to Sir William Ryland.
I shall be grateful if the Under-Secretary can say why these figures are confidential and why they are not available to the House. It is quite extraordinary that we should he expected to debate this mattter without the benefit of figures which I specifically requested six weeks ago and which have now been categorised as confidential.
It may be the view of the Post Office and the Government that the closure of the Bull Ring sub-post office is of no concern to this House or to my constituents and that we should be denied the necessary information on which to base our deliberations. If that is so, I very much hope that the Under-Secretary of State will say so himself in terms or on the other hand, and preferably, produce the information for the benefit of the House and my constituents, my constituents having a strong influence in the matter, as, I am sure, has the House.
Mr. Currall continued in his letter to me dated 14th April that
Post Office counter business has declined in the past year by 8 per cent. owing primarily to the withdrawal of the national insurance stamp.
He then wrote:
the withdrawal of the national savings stamp at the end of 1976 after allowing for the additional traffic that a new television stamp will generate, will result in a further loss of around 4 per cent, of counter traffic.
I appreciate that it is the duty of the Post Office to contain counter costs as far as it can, but I cannot see that the general circumstances recited by Mr. Currall have any relevance to the specific case of the Bull Ring sub-post office at Northwich, which is a particularly thriving enterprise. It is almost as if Marks and Spencer were to say "We are closing our busiest store in Oxford Street because we foresee problems facing us in the Outer Hebrides". If, contrary to the unanimous view in Northwich, the Bull Ring sub-post office is not a thriving enterprise, I very much hope that the Under-Secretary of State will produce the facts to support such a contention.
Particular concern has been expressed at the role of the Northwich Post Office Advisory Committee in this matter. I take the opportunity of paying a tribute to its efforts to save the Bull Ring sub-post office. It appears that the committee is now the only one still in existence within the area covered by the Altrincham Head Office. I shall be most grateful if the hon. Gentleman will let me know whether it is the policy of the Post Office to discourage such committees or whether it has no policy towards them.
Feelings in Northwich are very strong that decisions have been taken by the man in Whitehall, or perhaps more accurately I should say by the man in Manchester, without the slightest notice being taken of local opinion. The head postmaster in Altrincham notified the local Post Office advisory committee on 2nd March that the sub-postmaster had resigned and that after full consideration it was decided that the office should be closed. The notification took place prior to any consultation. A consultation took place after the decision had been made known to the committee. I cannot see how that fulfils any of the criteria normally related to the word "consultation". The consultation should have taken place in advance not only of action being taken but of the taking of the decision.
Following the meeting between the Post Office advisory committee and Mr. Cooke, a letter dated 15th April and received on 21st April was sent to Mr. Harold Hocking, the Northwich Town Clerk, in which Mr. Cooke wrote that
resultant upon that meeting much further thought has been given to the case by myself, by my Regional Headquarters, and at Post Office Headquarters, and to date I have not received the final decision from my headquarters and have thus made no public announcement.
Surprisingly, however, a letter from Mr. Currall, Managing Director of the Post Office, was sent to me on 14th April, the day before Mr. Cooke's letter, in which he says:
having personally examined the case I must support the Head Postmaster's decision.
It seems that there has been an unfortunate lack of communication both within the Post Office and between the Post Office and the Post Office advisory committee. It seems apparent that the


decision had already been taken at the time when Mr. Cooke wrote to Mr. Hocking on 15th April.
In a letter dated 13th April to the head postmaster at Altrincham, the Town Clerk of Northwich, on the instruction of the Northwich Town Council, wrote as follows:
At last night's meeting of the Town Council the Town Mayor (Councillor Harold Fletcher) reported on his attendance at the meeting of the Northwich Post Office Advisory Committee held on the 1st April 1976, when you discussed with the Committee your decision regarding the future of the above sub-post office. According to the Town Mayor you stated during the above meeting that the Northwich Advisory Committee was now the only surviving committee in your area which appears to support the views of the Town Council that such advisory committees will only continue to function if they are permitted to operate in an effective manner and, in this connection, I would refer to your letter to me of the 24th March last in which the following paragraph appears.
Then Mr. Hocking quotes:
'The Post Office Advisory Committee is a body set up in an area by local people, and not by the Post Office, for the purpose of considering the needs of that area in so far as Post Office services are concerned. The Committee meets quarterly and, when there are items of the Agenda, which require comment or explanation, they invite the Head Postmaster or the General Manager, Telephones, or their respective representatives to the meetings.'
Mr. Hocking continues:
As far as I am aware the Post Office Users Council was established by Section 14 of the Post Office Act 1969, and Section 15 of that Act reads"—
and he quotes:
'"Before the Post Office so puts into effect any major proposals relating to any of its main services as to affect the persons for whom they are provided, it shall be incumbent on it subject to the next following subsection, to refer the proposals to, and consult thereon with, the Post Office Users' National Council.'
Mr. Hocking says:
In my opinion the word 'consult' in the above mentioned Section 15 means in law that you must supply the Advisory Committee with sufficient information to enable them to tender advice to you on such matters as the future of the above Sub-Post Office and also give them sufficient opportunity to tender their advice.
He continues:
Your letter appears to indicate that you consider you are at liberty to reach a decision

on the future of the Bull Ring sub-post office and then, as stated in your letter"—
and he quotes,
'to explain how and why the conclusions have been reached'".
Mr. Hocking continues:
The Town Council have instructed me to take up with the Minister of Posts and Telecommunications and the Post Office Users' National Council, the question of the role of Advisory Committees having regard to the procedure adopted in this particular case but, before taking any further action, I would welcome your further observations on this matter.
Fortunately, this House will be relieved to know that we are not too late to save the situation. The Bull Ring sub-post office has not yet been closed. In view of the serious implications of the points raised in the Town Clerk's letter from which I have quoted, and of the wholly unsatisfactory explanations which have been forthcoming, I appeal to the Under-Secretary to tell the House on behalf of the Government that it is the Government's intention to reverse the decision to close the Bull Ring sub-post office until the whole matter has at least been the subject of a thorough inquiry, the results of which should be made public and available to my constituents and should be reported to the House. Once that has taken place, I am sure that it will be seen that there is no possible justification for withdrawing from my constituents a service which is so vital to them and which has been provided so efficiently by a very thriving and viable sub-post office.

10.30 p.m.

The Under-Secretary of State for Industry (Mr. Les Huckfield): I should like first to thank the hon. Member for Northwich (Mr. Goodlad) for the kind remarks and good wishes that he has expressed, and to congratulate him on the excellent and very comprehensive way in which he has dealt with this matter on behalf of his constituents. I can imagine the problems of the hon. Members' constituents. Not long ago I was a Back Bencher and raised similar problems with my present Department. Until something like this happens the Post Office is often taken for granted because of the comprehensive nature of the services which it provides. The hon. Member for Northwich expressed the feelings and difficulties of his constituents very well.
Let me begin by making it clear that the Government are not responsible for the provision of or closure of post offices or, as in this case, sub-post offices. The Post Office, by an Act of 1969, is no longer a Government Department. By that legislation it was made a nationalised corporation. In giving the Post Office full responsibility in the 1969 Act to operate as a nationalised corporation, Parliament clearly intended to remove any need for the House to intervene in matters affecting the day-to-day manage-men of the services provided by the Post Office.
My right hon. Friend the Secretary of State for Industry has certain reserve powers under the Act to give the Post Office directions, but only of a general character. I am sure the House would agree that it was not intended that these powers should be used in respect of day-to-day management decisions affecting particular sub-offices. The Post Office has a statutory obligation to exercise its powers in providing a postal service, including counter services, so as to meet efficiently and with economy the social, industrial and commercial needs of the British Isles.
The broad criterion which the Post Office adopts in reviewing the need for a sub-post office is that an office is not normally opened within one mile of an existing office in a town, or within two miles in a rural area. Local factors are also taken into account. These include the volume of business transacted at the office concerned, the nature and terrain of the area it serves, and the availability of local bus services. The Post Office assures me that it also gives full consideration to the needs of local residents, retirement pensioners in particular. Many pensioners in my constituency are not very mobile. Well before the event, local authorities and Post Office advisory committees are notified of any impending closures and the reasons for them. Their views and those of other interested parties are taken fully into account before a final decision is reached.
The hon. Gentleman mentioned the lack of information about business transacted at this sub-post office, but the figures that he sought are not mine to give. The Post Office regards it as important not to publish such information for security reasons. I am sure that the

hon. Gentleman understands that. The district head postmaster gave the advisory committee comparative percentages of business between the Bull Ring sub-post office and the Northwich Crown office.
I remind the House of the corporation's policy in respect of the provision and closure of sub-post offices. There are now 22,000 sub-post offices, which, together with 1,600 Crown offices, represent an area served per post office and population served per office one of the best services in the world. The rate of net decline is less than ½ per cent. per year.
This certainly does not bear out any suggestion that the Post Office is failing in its responsibility under the 1969 Post Office Act to provide adequate counter services for national needs. The provision of sub-post offices is important. The Government recognises this. The Post Office recognises it, too. It has stated publicly that substantial changes in numbers of offices will not be made.
I now turn to the question of consultation. I cannot accept what the hon. Member for Northwich has said about the inadequacy of the consultation procedures, either as they apply to normal Post Office proposals for closures of particular post offices, or to the more general issues affecting customers or users of the Post Office services.
I am sure that the hon. Gentleman, too, in his constituency duties has come across the Post Office Users' National Council. Only today my right hon. Friend the Secretary of State for Industry announced that parcel charges would be increased not by 25 per cent. but by only 13 per cent., very much as a result of the council's representations. Therefore, I am sure that the hon. Gentleman will agree that we have an effective watchdog.
The arrangements and procedures are part of a continuous dialogue between the industry and its users. Nobody is barred from putting forward his views and complaints about services. I assure the hon. Gentleman that the Post Office welcomes the committees as useful sources of advice on local needs and problems, but their status is as set out in the letter from the Post Office official which the hon. Gentleman quoted. They are not


statutory bodies, but rely on being spontaneously generated by local enterprise, whether local authorities or chambers of commerce.
The hon. Gentleman can also have a rôle to play. If he does not find that the advisory committee procedure is sufficiently active in his constituency, he can do a great deal to encourage a more active local machinery. The consultation procedures have been established for some time and are therefore well tried.
I understand that the proposal to close the Bull Ring sub-post office in Northwich was notified to the local Post Office advisory committee some three months in advance of the proposed closure date and that the district head postmaster in person explained to the committee the facts on which his proposal to close it was based.
I do not know how the proposed closure burst into Press before all the normal procedures had been followed, but I can give the hon. Gentleman the assurance that it was no part of the intention of the Post Office to present his constituents with a fait accompli which they could not discuss. I have already stressed the comprehensive nature of the normal Post Office consultation procedure.
The Post Office had strong reservations about the suitability of the counter and access facilities of the Bull Ring sub-post office. I understand that within half a mile three alternative post offices, especially the Northwich Crown office, are available to handle business. The Post Office takes local factors into consideration before coming to final conclusions, after submitting the matter to the normal consultative procedure.
It would not be proper for me to intervene in the normal day-to-day operational affairs of the Post Office. Therefore, I could not reverse the decision in this case. However, having noted the way in which the hon. Gentleman has put his case on behalf of his constituents, I shall expressly draw the attention of the Chairman of the Post Office Corporation, Sir William Ryland, to the points he has made. I am sure that the Post Office will take careful note of them.
I hope that the hon. Gentleman's constituents will regard this as a very useful debate. I am only sorry that I cannot give him some better news to take to his constituency this weekend.

Question put and agreed to.

Adjourned accordingly at twenty-one minutes to Eleven o'clock.